External broker reports(aggregated public sources), CMB International

CMB International

External broker reports(aggregated public sources)

Incorporated in Hong Kong, supported by the mainland and targeting in global market, CMB International Capital Corporation Limited (“CMBI”) is an integrated financial institution providing comprehensive and professional services. As a wholly-owned subsidiary of China Merchants Bank ("CMB"), by leveraging on the Group’s synergy and coordination in domestic and overseas markets, as well as CMB’s strong resources and outstanding social reputation, CMBI and its subsidiaries have been actively implementing diversified business strategies and set up an overall layout of main business segments including Corporate Finance, Asset Management, Wealth Management, Global Markets and Structured Finance, etc. Adhering to the philosophy of “being clients oriented and increasing our own values by the way of creating value for clients”, CMBI endeavors to provide quality and integrated financial services to institutional, corporate and individual customers both domestic and overseas including Hong Kong IPO sponsorship and underwriting, share placement and rights issue for listed companies, financial advisors, bonds issuance services, asset management, direct investment, wealth management, equity sales and trading, etc.

Equity Bottom-Up

<ul><li>We expect Baidu Core business to deliver revenue growth in line with our expectation but slightly slower than market consensus estimates in 2Q24E, owing to the proactive business adjustment to embed more GenAI-related results in search results which are currently under-monetized, as well as the soft macro environment which has weighed on overall advertising budget.</li><li>However, we are positive that this proactive adjustment could help improve user experience and enhance long-term monetization prospects.</li><li>Cloud profitability is on expansion track, and the increase in penetration of fully driverless cars, as well as the deployment of new car models could drive unit economics (UE) improvement for Robotaxi business, in our view. </li></ul>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

We expect Baidu Core business to deliver revenue growth in line with our expectation but slightly slower than market consensus estimates in 2Q24E, owing to the proactive business adjustment to embed more GenAI-related results in search results which are currently under-monetized, as well as the soft macro environment which has weighed on overall advertising budget.However, we are positive that this proactive adjustment could help improve user experience and enhance long-term monetization prospects.Cloud profitability is on expansion track, and the increase in penetration of fully driverless cars, as well as the deployment of new car models could drive unit economics (UE) improvement for Robotaxi business, in our view. Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Baidu (BIDU US) - Impact from Proactive Business Adjustment Likely in Line with Our Expectation

Independent research on the U.S. markets, Baptista Research

Baptista Research

Independent research on the U.S. markets

Baptista Research is an independent financial research house focused on the U.S. markets. We provide equity research as well as credit research reports on the top-listed U.S. companies with most of our focus on technology, consumer goods and services, automobiles, industrials, oil and gas, pharma, and healthcare. Our research has served more than 3000 institutional investors including mutual funds, hedge funds, banks, family offices, and various buy-side firms. We operate a research subscription service where institutions, as well as retail investors, can have priority access to all our research. We also have a wide distribution of our research reports across some of the top global financial platforms. Apart from equity research and credit research, we also provide advisory services with respect to mergers & acquisitions (M&A), private equity/ venture capital fundraising, valuation reports, and investment management services for corporates.
Baptista Research is owned and managed by Ishan Majumdar, an ex-Venture Capitalist/ Investment Banker, a Chartered Accountant, and a Masters’ degree holder in Management from HEC Paris. Ishan has nearly a decade of experience in Mergers and Acquisitions, Leveraged Buyouts (LBOs), Venture Capital Investing, Corporate Strategy, and Valuation in front-office roles at the likes of BNP Paribas CIB, Credit Agricole CIB, Groupe Danone, and TIW Private Equity. He has worked on and closed multiple acquisition deals, leveraged buyouts, and start-up investment transactions.

<ul><li>Baidu's revenue growth for the first quarter exceeded expectations, with a year-over-year increase of 4%, reaching RMB 23.8 billion.</li><li>Additionally, Baidu's continued efforts in Gen AI path have resulted in a 12% year-over-year acceleration in the revenue growth from Baidu AI Cloud, which also delivered an operating profit on a non-GAAP basis.</li><li>These positive results signify the company's successful transition from an internet-centric business to an AI-first business.</li></ul>

Baidu's revenue growth for the first quarter exceeded expectations, with a year-over-year increase of 4%, reaching RMB 23.8 billion.Additionally, Baidu's continued efforts in Gen AI path have resulted in a 12% year-over-year acceleration in the revenue growth from Baidu AI Cloud, which also delivered an operating profit on a non-GAAP basis.These positive results signify the company's successful transition from an internet-centric business to an AI-first business.

Baidu Inc.: What Are Their Expansion Plans Of AI Offerings Beyond Ernie? - Major Drivers

<ul><li>Baidu announced (16 May) its 1Q24 results: revenue was RMB31.5bn, up 1.2% YoY, and was in line with Bloomberg consensus.</li><li>Non-GAAP net income of Baidu Core was RMB6.6bn, better than consensus at RMB5.1bn, thanks to better-thanexpected cost control.</li><li>Management highlighted that AI-related ads and cloud revenue are continuously ramping up, and it is accelerating generative AIempowered search business transformation, to drive better long-term business development prospects. </li></ul>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Baidu announced (16 May) its 1Q24 results: revenue was RMB31.5bn, up 1.2% YoY, and was in line with Bloomberg consensus.Non-GAAP net income of Baidu Core was RMB6.6bn, better than consensus at RMB5.1bn, thanks to better-thanexpected cost control.Management highlighted that AI-related ads and cloud revenue are continuously ramping up, and it is accelerating generative AIempowered search business transformation, to drive better long-term business development prospects. Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Baidu (BIDU US) - Accelerating Gen AI-Empowered Business Transformation

China New Economy Equity Analyst, Blue Lotus Research Institute

Robert McKay

China New Economy Equity Analyst

China growth and global non-US Internet equities

Blue Lotus Research Institute

Blue Lotus Research is a Hong Kong Type 4 Licensed investment advisory firm focusing on Chinese growth equities and global non-US Internet equities

Thematic (Sector/Industry)

<ul>
<li>US semiconductor restrictions are limiting China's access to advanced AI accelerators, causing a widening gap in AI compute. The US will expand its lead over China to ~7x by 2025.</li>
<li>Although China has domestic alternatives, bottlenecks due to separate US restrictions on semiconductor equipment are hindering yields and capacity expansions, effectively limiting China’s capacity to train state-of-the-art AI models.</li>
<li>To maximize AI compute, Huawei will likely curtail smartphone semiconductors in favor of AI accelerators. We expect manufacturers offering mid-end Android devices like <a href="https://www.smartkarma.com/entities/xiaomi-corp" target="_blank" data-smartkarma-citation="entities:24409:1" rel="noopener">Xiaomi Corp (1810 HK)</a> to benefit first.</li>
</ul>


US semiconductor restrictions are limiting China's access to advanced AI accelerators, causing a widening gap in AI compute. The US will expand its lead over China to ~7x by 2025.
Although China has domestic alternatives, bottlenecks due to separate US restrictions on semiconductor equipment are hindering yields and capacity expansions, effectively limiting China’s capacity to train state-of-the-art AI models.
To maximize AI compute, Huawei will likely curtail smartphone semiconductors in favor of AI accelerators. We expect manufacturers offering mid-end Android devices like Xiaomi Corp (1810 HK) to benefit first.


Demand for AI Chips Might Cut Huawei's Smartphone Semiconductor Short

<ul><li>We expect Baidu Core to deliver mild ads revenue growth in 1Q24, driven by solid performance in travel and e-commerce verticals, but partly offset by the soft performance in offline verticals which are in tune with macro activity levels.</li><li>Baidu remains committed to investing in gen-AI related opportunities to drive long-term revenue and earnings growth, while focusing on quality growth and operating efficiency improvement of non-core business.</li><li>The pace of monetization for gen-AI related ads and cloud revenue remains a key catalyst. </li></ul>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

We expect Baidu Core to deliver mild ads revenue growth in 1Q24, driven by solid performance in travel and e-commerce verticals, but partly offset by the soft performance in offline verticals which are in tune with macro activity levels.Baidu remains committed to investing in gen-AI related opportunities to drive long-term revenue and earnings growth, while focusing on quality growth and operating efficiency improvement of non-core business.The pace of monetization for gen-AI related ads and cloud revenue remains a key catalyst. Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Baidu (BIDU US) - Expect Mild Ads Revenue Growth in 1Q24

China

Baidu, Inc. operates an Internet search engine. The Company offers algorithmic search, enterprise search, news, MP3, and image searches, voice assistance, online storage, and navigation services. Baidu serves clients globally.

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Baidu (BIDU US)

Baidu (BIDU US) - Impact from Proactive Business Adjustment Likely in Line with Our Expectation

We expect Baidu Core business to deliver revenue growth in line with our expectation but slightly slower than market consensus estimates in 2Q24E

CMB International

Baidu Inc.: What Are Their Expansion Plans Of AI Offerings Beyond Ernie? - Major Drivers

Baidu's revenue growth for the first quarter exceeded expectations, with a year-over-year increase of 4%, reaching RMB 23.8 billion. Additionally,...

Baptista Research

Baidu (BIDU US) - Accelerating Gen AI-Empowered Business Transformation

Baidu announced (16 May) its 1Q24 results: revenue was RMB31.5bn, up 1.2% YoY, and was in line with Bloomberg consensus.

CMB International

Demand for AI Chips Might Cut Huawei's Smartphone Semiconductor Short

US AI accelerator and wafer equipment restrictions are widening the US/China AI compute gap. Expect Huawei to curtail smartphone IC in favor of AI...

Blue Lotus Research Institute

Baidu (BIDU US) - Expect Mild Ads Revenue Growth in 1Q24

We expect Baidu Core to deliver mild ads revenue growth in 1Q24, driven by solid performance in travel and e-commerce verticals

CMB International

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Baidu (BIDU US) - Impact from Proactive Business Adjustment Likely in Line with Our Expectation

We expect Baidu Core business to deliver revenue growth in line with our expectation but slightly slower than market consensus estimates in 2Q24E

CMB International

Baidu Inc.: What Are Their Expansion Plans Of AI Offerings Beyond Ernie? - Major Drivers

Baidu's revenue growth for the first quarter exceeded expectations, with a year-over-year increase of 4%, reaching RMB 23.8 billion. Additionally,...

Baptista Research

Baidu (BIDU US) - Accelerating Gen AI-Empowered Business Transformation

Baidu announced (16 May) its 1Q24 results: revenue was RMB31.5bn, up 1.2% YoY, and was in line with Bloomberg consensus.

CMB International

Demand for AI Chips Might Cut Huawei's Smartphone Semiconductor Short

​US AI accelerator and wafer equipment restrictions are widening the US/China AI compute gap. Expect Huawei to curtail smartphone IC in favor of AI...

Blue Lotus Research Institute

Baidu (BIDU US) - Expect Mild Ads Revenue Growth in 1Q24

We expect Baidu Core to deliver mild ads revenue growth in 1Q24, driven by solid performance in travel and e-commerce verticals

CMB International

US AI accelerator and wafer equipment restrictions are widening the US/China AI compute gap. Expect Huawei to curtail smartphone IC in favor of AI...