BIDU(09888) 长城证券·2024-06-04 06:01Investment Rating - The report maintains a "Buy" rating for Baidu Group, expecting the stock price to outperform the industry index by over 15% in the next six months [4][12]. Core Insights - Baidu's core business remains robust, with a focus on advancements in AI and intelligent driving. The company reported a revenue of 315.13 billion CNY in Q1 2024, with a year-on-year growth of 1% and a non-GAAP net profit of 70.11 billion CNY, reflecting a 22% increase [2][3]. - The intelligent cloud business is accelerating, with a 12% year-on-year revenue growth in Q1 2024, driven by Gen AI and foundational models [2][3]. - The autonomous driving service, "Luobo Kuaipao," saw a 25% increase in order volume, with expectations of achieving breakeven in the Wuhan region by the end of 2024 [3]. Financial Summary - Revenue projections for 2024-2026 are 146.20 billion CNY, 156.86 billion CNY, and 166.77 billion CNY, respectively, with net profits expected to be 23.09 billion CNY, 26.05 billion CNY, and 29.01 billion CNY [6][7]. - The report indicates a steady increase in EPS, projected at 8.26 CNY, 9.31 CNY, and 10.37 CNY for the years 2024, 2025, and 2026, respectively [6][7]. - The P/E ratio is expected to decrease from 40.1 in 2023 to 10.4 by 2026, indicating improved valuation [2][6]. Business Developments - Baidu's core intelligent cloud business is benefiting from AI-driven innovations, with significant contributions from Gen AI and foundational models, which accounted for 6.9% of AI cloud revenue in Q1 2024 [2][3]. - The launch of lightweight large models has enhanced the development environment for developers, increasing the number of developers in the Baidu PaddlePaddle community to 13 million [2]. - The autonomous driving segment is expected to replicate success in other regions following the anticipated breakeven in Wuhan, supported by advanced technology and cost reductions in vehicle production [3].