Baidu (BIDU), HK 9888; 02 (Nov 22 - Dec 26)

[winston]

vested

Baidu’s revenue beats as ChatGPT-style AI starts monetisation

By Zheping Huang

Sales grew 6% to 34.4 billion yuan (RM22.17 billion) from July to September, versus the 34.2 billion yuan projected by analysts.

Net income came to 6.7 billion yuan in the September quarter, versus the 4.4 billion yuan expected.

Baidu’s Ernie Bot has amassed 70 million users three months after its public roll-out.

Baidu has infused Ernie into its flagship products from search to maps and file-sharing, and the company now charges a monthly subscription fee of about US$8 (RM37.26) to users of its latest chatbot.

Baidu still counts on advertising as its bread-and-butter.

Short-video platforms including ByteDance’s Douyin remain a threat as they lure users and marketers away.

Last year, Baidu’s share of Chinese mobile users’ screentime remained largely unchanged at 8%, while ByteDance increased its slice to 25%.

Source: Bloomberg

https://theedgemalaysia.com/node/690760

[winston]

Baidu Inc (9888 HK)
3Q23: Earnings Beat; Expecting Monetisation Of ERNIE 4.0

Baidu’s 3Q23 earnings beat expectations.

Revenue grew 6% yoy to Rmb34b, in line with the street’s estimate.

Gross margin expanded 2.7ppt yoy to 52.7%, above consensus expectation.

Non-GAAP operating profit was Rmb7.6b, up 9% yoy, while non-GAAP operating profit margin came in at 22%, beating our estimate.

Despite investments in AI, non-GAAP net profit improved 23% yoy to Rmb7.3b, exceeding consensus estimate by 16%.

Maintain BUY with a lower target price of HK$166.00 (US$171.00).

Source: UOBKH

https://research.uobkayhian.com/content ... 5be0ed5400

[winston]

vested

Brokers│Opinions

Jefferies│Profit potential of ERNIE Bot was unleashed

BofA Securities│3Q core operating profit growth beat; earnings estimates was lifted

Citi│3Q revenue growth was in line; core earnings and operating profit beat; earnings estimate was hiked

Goldman Sachs│Monetization of ERNIE Bot was the market focus

Morgan Stanley│3Q revenue growth was in line; profit margins beat

UBS│3Q revenue, core earnings and operating profit beat

CLSA│3Q core revenue growth beat; but advertising revenue growth slowed

Nomura│3Q earnings growth beat; revenue growth was broadly in line

Source: AAStocks Financial News

http://www.aastocks.com/en/stocks/news/ ... -news/AAFN

[winston]

vested

Earning Alert: 3Q23 earnings beat; Ad growth momentum to pick up in 4Q23 due to end-of-year festival season

3Q23 revenue increased by 6% y-o-y, with online marketing revenue rising by 5%; earnings increased by 23%; in line

Expect ad growth momentum to pick up in 4Q23, amid the peak year-end shopping festival

Recent launch of Ernie 4.0 will support cloud and ad growth in longer term, on top of the monetisation from Ernie BOT

Maintain BUY with TPs unchanged at HK$186/US$188

Source: DBS

https://www.dbs.com/insightsdirect/comp ... ecid=17353

[winston]

CICC: Baidu (BIDU.US) Commits to AI Native, Eyes Product Change

Its 3Q revenue increased by 6% YoY to RMB34.4 billion, basically in line with market expectations.

Core revenue elevated by 5% YoY to RMB26.6 billion, also broadly in line with market expectations.

Non-GAAP net profit of RMB7.3 billion was 15.8% over market consensus, mainly due to good cost control and optimised operating leverage.

Baidu announced a three-year share buyback programme of US$5 billion at the beginning of the year, and the cumulative buyback amount reached US$351 million by the end of 3Q, which was a slow progress.

CICC broadly maintained its 2023 and 2024 revenue and 2024 non-GAAP net profit forecasts.

Related News: BofAS: BIDU-SW (09888.HK) 3Q23 Earnings Beat; Earning Forecast Lifted

Taking into account the company's expected profit release, CICC raised its 2023 non-GAAP net profit forecast by 1% to RMB26.8 billion, and maintained its Outperform rating.

The broker kept its target price of US$172.5 for Baidu US shares (BIDU.US) and HK$167.1 for BIDU-SW (09888.HK) , Baidu's H-shares.

Source: AAStocks Financial News

http://www.aastocks.com/en/stocks/news/ ... -news/AAFN

[winston]

vested

Baidu’s foundational operating segment is its internet search engine and that’s unlikely to change.

In December, Baidu accounted for 66.52% of all search share in China, according to data from GlobalStats.

But there’s more to like about Baidu than just its massive moat in internet search. Specifically, the company’s burgeoning AI-driven segments offer outsized growth potential.

Apollo Go is the world’s top autonomous ride-hailing company by total rides since inception (4.1 million). Meanwhile, enterprise cloud spending is still in its early stages of expansion, which should fuel a revenue ramp for Baidu’s AI Cloud. AI has the potential to be a major cash-flow driver for Baidu, but it could require some patience as the technology matures.

The valuation also makes a lot of sense. Even accounting for the added regulatory risks that comes with investing in China stocks, Baidu shares can be purchased for less than 11 times forward-year earnings. That’s exceptionally inexpensive for a company that’s historically grown by a double-digit rate.

Source: Daily Trade Alert

[winston]

vested

BIDU-SW Crashes; Ernie Foundation Model Reportedly Used by CN Military Research

Baidu US shares (BIDU.US) crashed 7% on Friday (12 Jan), and H-shares BIDU-SW (09888.HK)
also opened crumpling.

According to South China Morning Post, a mainland military research lab used Baidu's Ernie foundation model and iFLYTEK's Spark foundation model, to make military AI more humanised.

Baidu responded that its Ernie foundation model is publicly online and the company has no cooperation or affiliation with the military research lab, nor any knowledge of the military research project.

Source: AAStocks Financial News

http://www.aastocks.com/en/stocks/analy ... stock-news

[winston]

vested

Baidu slides 10% after report links Ernie AI to Chinese military

The South China Morning Post (SCMP) reported that a research laboratory associated with the People’s Liberation Army (PLA) Strategic Support Force had tested an experimental AI system on Baidu’s Ernie and peer IFlyTek’s Spark large language models.

Baidu told the SCMP that the company had no affiliation with the laboratory, and that any version of the Ernie bot used in the testing was likely a publicly available version.

But the report ramped up concerns that any potential affiliation with the PLA could attract sanctions from the U.S., especially as both countries explore military applications of AI.

Baidu’s Ernie bot was the company’s answer to OpenAI’s ChatGPT, coming just a few months after the latter, amid a global push into large language models.

Baidu had already begun monetizing the model by late-2023, logging stronger sales in the third quarter on revenue from its AI offerings.

Source: investing.com

https://finance.yahoo.com/news/baidu-sl ... 02686.html

[winston]

vested

Baidu sinks most since 2022 despite denying links to PLA AI

By Zheping Huang & Jeanny Yu

Chinese military use of Baidu’s Ernie large language model for an internal AI project, according to a South China Morning Post report, could raise tensions with the US and raises the question of whether this might attract potential US sanctions.

Baidu’s Ernie Bot amassed 100 million users months after its public rollout, and the company claims its self-developed model has matched GPT-4 in terms of general capabilities.

Beyond the report, investors are worried about Baidu’s prospects during a Chinese economic downturn — especially with Ernie still some way off from yielding enough revenue to offset a fundamental decline in online advertising.

“People are worried about sanctions on Baidu obviously after the news report about military ties. They fear that the US government may announce measures to target Baidu.

“The overall sentiment over China is weak and US-China relationship is still intense, so investors sell first no matter if the news is true or not.”

Source: Bloomberg

https://theedgemalaysia.com/node/697341

[winston]

vested

Samsung to integrate Baidu’s AI model into new Galaxy S24 handsets, as mainland Chinese rivals push new smartphones with similar tech

Samsung’s Galaxy S24 series smartphones will deploy Baidu’s Ernie AI model to perform the handsets’ new ‘Circle of Search’ feature

Ernie will also help users translate and summarise texts, as well as transcribe speech in multiple languages via the Note Assistant function

by Iris Deng

Source: SCMP

https://www.scmp.com/tech/big-tech/arti ... s-push-new