Investment Rating - The report maintains a "Buy" rating for Baidu Group-SW (9888.HK) [1] Core Views - Baidu's Q3 2025 revenue was approximately 31.17 billion yuan, a year-on-year decline of 7% and a quarter-on-quarter decline of 5%. The non-GAAP net profit was 3.77 billion yuan, down 36% year-on-year and 21% quarter-on-quarter, with a gross margin of approximately 41.25% [4][5] - The core business revenue for Baidu was 24.66 billion yuan, also down 7% year-on-year and 6% quarter-on-quarter. The non-GAAP operating profit was 2.23 billion yuan, a significant drop of 67% year-on-year and 49% quarter-on-quarter [4][5] Summary by Sections Recent Performance - Baidu's total revenue for Q3 2025 was approximately 31.17 billion yuan, with core revenue of about 24.66 billion yuan, both reflecting a 7% year-on-year decline. iQIYI's revenue was 6.7 billion yuan, down 8% year-on-year [4][5] - Online marketing revenue decreased by 18% year-on-year, while non-online marketing revenue grew by 21% [5] Online Marketing - The online marketing segment saw revenue of approximately 15.3 billion yuan, down 18% year-on-year. Baidu is advancing AI transformation in its search services, with about 70% of mobile search results pages containing AI-generated content. AI-native marketing services have become a significant growth driver, achieving revenue of 2.8 billion yuan, a year-on-year increase of 262% [5][6] Cloud Services - Baidu is accelerating the development of enterprise AI-native applications, with AI application revenue reaching 2.6 billion yuan, a 6% year-on-year increase. The intelligent cloud infrastructure revenue was 4.2 billion yuan, up 33% year-on-year, and AI high-performance computing facility subscription revenue grew by 128% [6][7] Autonomous Driving - Baidu's autonomous driving business is expanding globally, with over 250,000 weekly orders for fully autonomous operations as of October 2025. The service has been launched in 22 cities, with significant partnerships in Switzerland and Abu Dhabi [6][7] Financial Forecast - The report adjusts Baidu's revenue forecasts for 2025-2027 to 130.2 billion, 136.8 billion, and 145.4 billion yuan, respectively. Non-GAAP net profits are projected at 19.2 billion, 20.1 billion, and 22.7 billion yuan, with corresponding non-GAAP EPS of 6.99, 7.29, and 8.26 yuan. The non-GAAP P/E ratios are expected to be 14.9, 14.3, and 12.6x [7][9]