not vested
Baidu Inc (BIDU US) - Riding on the coattails of China’s recovery
Baidu’s revenue increased by 1% YoY to RMB 28.2b (3% above consensus) on the back of an improvement in the Baidu Core.
Non-GAAP PATMI rose 59% YoY to RMB 7.0b, which was 53% above consensus.
Encouragingly, Baidu is guiding for revenue of -1% to 8% YoY in growth for 4Q, which at the mid-point is 3% higher than consensus.
On Baidu Core, many advertising verticals have turned around in 3Q, including healthcare, education, and auto.
In-app advertising, which we note is a growing majority of Baidu's mobile ecosystem revenue, continues to see healthy double-digit growth.
We believe that Baidu will continue to benefit from an improvement in the business environment as China continues to recover from the pandemic.
Baidu also announced that it has entered into agreements to acquire JOYY’s domestic video-based entertainment live streaming business in China (YY Live) for ~US$3.6b in cash.
We agree with management that live streaming can grow across different verticals beyond entertainment while being used by advertisers to connect better with users and improve overall conversion.
Still, we believe that time will be needed to better assess the extent and value of synergies arising from this acquisition. Maintain BUY.
Source: OCBC