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

[Baidu (BIDU US, BUY, TP US$162) Earnings Review]: Online Ads Growth Will Remain Robust

[Baidu, Inc. (BIDU US, BUY, TP US$157) TP Change]: C4Q/2024 Ads Upswing Bridge Gap to the Future

[Baidu, Inc. (BIDU US, BUY, TP US$146)TP Change]: The Commercialization Path of AI Is Becoming Clear

[Baidu (BIDU US) Target Price Change]: Better Recovery with Leading Position in AIGC

[Baidu (BIDU US, BUY, TP US$178) Target Price Change]: Maintain BUY for Faster Recovery and AIGC

[Baidu (BIDU US) Target Price Change]: Margin Improvement Offsets R&D Increase

China/Asia TMT

Shawn Yang

Equity Bottom-Up

<ul>
<li>We estimate Baidu's ads revenue growth in 2Q23 will be 10.8% YoY. We largely cut our forecast of 3Q23’s ads revenue growth from 14.7% to 7.1%.</li>
<li>We lower Baidu's core other revenue growth in 2Q23 from 18.0% to 9.0% YoY. Baidu’s smart transportation AI cloud business has been affected by the contraction in local government expenses.</li>
<li>We expect Baidu's 2Q23’s rev./non-GAAP net income to be (2.3%)/ (1.9%) vs cons, also cut the TP to $162, which implies 16.5X PE in 2023.</li>
</ul>


We estimate Baidu's ads revenue growth in 2Q23 will be 10.8% YoY. We largely cut our forecast of 3Q23’s ads revenue growth from 14.7% to 7.1%.
We lower Baidu's core other revenue growth in 2Q23 from 18.0% to 9.0% YoY. Baidu’s smart transportation AI cloud business has been affected by the contraction in local government expenses.
We expect Baidu's 2Q23’s rev./non-GAAP net income to be (2.3%)/ (1.9%) vs cons, also cut the TP to $162, which implies 16.5X PE in 2023.


[Baidu, Inc. (BIDU US, BUY, TP US$162) TP Change]: Cut TP Due to Weaker Outlook in Ads and Cloud