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

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Baidu Inc (9888 HK)
4Q23 Results Preview: AIGC Monetisation To Foster Ads And AI Cloud

4Q23 results will be released in mid-Mar 24.

We forecast 4Q23 revenue to grow 7% yoy, mainly anchored by incremental contributions from ad and AI Cloud revenue growth, empowered by AI application.

Management expects AI-related ad revenue in 4Q23 to hit hundreds of millions in renminbi, with a low to mid single-digit revenue contribution to AI Cloud.

Baidu also expects quarterly revenue from generative AI to surpass Rmb1b in 2024.

Maintain BUY with a lower target price of HK$135.00 (US$138.00).

Source: UOBKH

https://research.uobkayhian.com/content ... 3715915173

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Baidu’s Profit Halves After AI Spending Erodes Bottom Line

by Zheping Huang

The company reported a December-quarter net income of 2.6 billion yuan ($361 million) that missed projections, though much of that stemmed from a loss from equity accounting for preferred shares.

It overshadowed a 6% rise in revenue after Baidu’s ChatGPT-style service began to augment advertising sales.

Attracted more than 100 million users to its ChatGPT-style service — now including a premium tier that charges a monthly subscription.

Source: Reuters

https://finance.yahoo.com/news/baidu-re ... 26003.html

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Baidu’s revenue rose 6 per cent after its ChatGPT-style service began to augment advertising sales, helping the Chinese AI leader weather a severe economic downturn.

The company reported sales of nearly 35 billion yuan (S$6.5 billion) for the three months ended December, broadly in line with analysts’ projections.

Net income slid 48 per cent to 2.6 billion yuan.

To rekindle growth, Baidu has joined Silicon Valley peers from Microsoft to Google, in seeking ways to monetise generative AI.

The Chinese company has attracted more than 100 million users to its ChatGPT-style service – now including a premium tier that charges a monthly subscription – giving it a headstart against peers like Tencent Holdings and ByteDance.

But revenue generated by the AI model, known as Ernie, is a drop in the bucket for Baidu, which still relies mainly on search ads.

Source: Phillips

[winston]

Baidu Inc (9888 HK)
4Q23: Results In Line; All Eyes On AI-powered Ads And Ernie Bot In 2024

Baidu’s 4Q23 results were within expectations. Revenue grew 6% yoy to Rmb35b, in line with consensus estimates.

Gross margin expanded 1.4ppt yoy to 50.2%, within consensus expectations.

Non-GAAP operating profit was Rmb7.1b, up 9% yoy, while non-GAAP operating profit margin came in at 20%.

Non-GAAP net profit improved by 44% yoy to Rmb7.8b on one-off gains, exceeding consensus estimates by 22%.

Maintain BUY with a lower target price of HK$128.00 (US$142.00).

Source: UOBKH

https://research.uobkayhian.com/content ... f6645d29df

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Broker│Opinion

Jefferies│Maintains revenue growth forecast for this year

CMBI│Focuses on generative AI business

Citi│4Q23 earnings exceeded expectations

UBS│Core revenue and earnings growth in 4Q23 in line

Goldman Sachs│4Q23 sales in line, AI sales revenues propel earnings to beat

BOCI│AI transformation driving growth

CLSA│Generative AI growing steadily

HSBC Global Research│Generative AI monetisation advances as expected

BofA Securities│Weak macro-economy poses risk

CICC│Full-year margins expected to be relatively healthy

Macquarie│AI business progressing as expected

Nomura│4Q23 net profit beats expectations, but 1Q24 outlook cautious

Morgan Stanley│4Q23 operating revenue and core operating revenue in line, while earnings and
core earnings beat

Source: AAStocks Financial News

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

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4 Reasons to Buy Baidu Stock Like There's No Tomorrow

by Rick Munarriz

1. Baidu is cheap
2. The beats keep coming
3. Tech is still a thing at Baidu
4. China's headwind can be a tailwind

Source: The Motley Fool

https://finance.yahoo.com/news/4-reason ... 00921.html

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<Research>G Sachs Chops BIDU-SW (09888.HK) TP to $157, Cautious on Ads Biz amid Uncertain Macro-econ

Goldman Sachs released a research report expecting BIDU-SW (09888.HK)'s 1Q24 revenue growth to be weak, mainly due to prudence approach on advertising business in the uncertain macro economy and a high base in 1H23.

However, Goldman Sachs expected 2H24 growth to accelerate, covering the base issued in 2Q24.

Related News: UBS Trims Baidu (BIDU.US) TP to US$170 as Macro Environment Weighs on Short-term Core Growth

BIDU-SW remains on track to execute its generative AI solution, which is expected to bring in revenue of RMB3.6 billion this year, Goldman Sachs said.

Goldman Sachs expected a 2% YoY growth in the Group's 1Q24 core sales, and a 3% YoY fall in operating profit, and lowered its 2024/ 2025/ 2026 revenue forecasts for the Group by 3%/ 4%/ 5%, respectively.

Goldman Sachs also reduced its net profit forecasts by 5%/ 6%/ 8% for 2024/ 2025/ 2026 each, and chopped its target price from $167 to $157, with rating kept at Buy.

Source: AAStocks Financial News

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

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<Research>CCBI Drops BIDU-SW (09888.HK) TP a Bit to HK$138.1, Expects Slow Ad Recovery & Stable Cloud Growth in 1Q

CCBI issued a research report, lowering its core revenue forecast for BIDU-SW (09888.HK) by 4% in 1QFY24, reflecting the slow recovery of advertising and the shrinking scale of Xiaodu's hardware business.

The broker also trimmed the group's revenue forecasts for FY24/FY25/FY26 by 1%, 1%, and 2% respectively.

The broker expected BIDU's revenues from advertising and cloud businesses to grow 2% and 9% respectively in 1Q, with core revenue elevating 2% YoY to RMB23.5 billion.

Other business revenue may fall by 10% due to lower revenue from its Xiaodu subsidiary.

Related News: G Sachs Chops BIDU-SW (09888.HK) TP to $157, Cautious on Ads Biz amid Uncertain Macro-econ

In 4Q23, generative AI and foundation models contributed RMB270 million, or 4.8%, to BIDU's overall cloud revenue and the broker expected that the contribution from AI will increase and become the main driving force of the group's overall cloud business in FY24.

CCBI trimmed its target price for BIDU's H-shares from HK$139.36 to HK$138.1 and lowered its target price for BIDU's US shares from US$143.3 to US$142.

The broker maintained the Outperform rating for both shares.

Source: AAStocks Financial News

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

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<Research>Macquarie Expects BIDU-SW (09888.HK) 1Q Rev. to Slow down, but Earnings Resilient; Rating Outperform

Macquarie noted in a report that BIDU-SW (09888.HK) is expected to report modest revenue growth in 1Q24, mainly due to seasonal factors and advertising demand, with core advertising revenue expected to grow by 1% YoY to RMB16.7 billion, which is 3% lower than the market's consensus forecast.

Macquarie believed BIDU's AI capabilities will continue to drive advertising effectiveness, but the macroeconomic environment is still weighing on core advertising revenue growth.

The broker added that advertising demand from health and e-commerce was resilient, while spending on automotive and property advertising was weak.

Related News: Daiwa: BIDU-SW (09888.HK) Mar Ad Recovery Misses Forecast; 1Q24 Core Rev. Growth Forecast Cut

According to the report, BIDU's cloud business is likely to see slower growth in 1Q due to seasonal factors, with revenues estimated to rise 8% YoY.

However, the group's investment strategy has been stable in the past, and the broker is confident in its earnings outlook, with an adjusted operating profit margin of 21% expected in the quarter.

Macquarie maintained its EPS forecast on BIDU for 2024, but trimmed that for 2025 by 2% to reflect macroeconomic headwinds.

The broker slightly decreased BIDU's target price to $133 from $134 and rated it Outperform.

Source: AAStocks Financial News

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

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<Research>CICC Foresees Baidu (BIDU.US) 1Q Rev. to be Flat, Non-GAAP NP RMB5.6B

Baidu (BIDU.US) was expected to report roughly flat revenue of RMB31.1 billion for 1Q24, with core revenue adding by 2% to RMB23.5 billion, CICC said in a report.

The broker estimated Baidu's 1Q24 net profit to be RMB5.6 billion on a non-GAAP basis, with a core profit of RMB5.2 billion.

CICC maintained its revenue and non-GAAP net profit forecasts for 2024 and 2025, and kept TP on BIDU-SW (09888.HK) at $146.9 and Baidu (BIDU.US) US$151.6, with rating Outperform.

Related News: UBS Trims Baidu (BIDU.US) TP to US$170 as Macro Environment Weighs on Short-term Core Growth

Source: AAStocks Financial News

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