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

Stimulus Policies Are Now the Biggest Determinant of Internet Ads Performances

[Baidu, Inc. (BIDU US, SELL, TP US$78) Preview]: Baidu’s Problem Is Deep Rooted and Getting Worse

[Baidu, Inc. (BIDU US, SELL, TP US$80) TP Change]: AI Monetization by How Much & At What Cost?

A Comparison of Tesla’s Cybercab and Baidu’s Apollo Shows the Latter Must Improve

[Baidu, Inc. (BIDU US, SELL, TP US$84) Preview]: C3Q24 Preview: Slump in Economy Exacts Its Toll

[Baidu, Inc. (BIDU US, SELL, TP US$80) TP Change]: Baidu’s Problem Is Not All Cyclical…Maintain SELL

Blue Lotus Non US Internet research, Blue Lotus Research Institute

Ying Pan

Blue Lotus Non US Internet research

Equity Bottom-Up

<ul>
<li>BIDU reported C3Q24 top line, non-GAAP operating profit and GAAP net income in-line, 4.6% and 66% vs. our estimate and in-line, 8.7% and 46% vs. consensus.</li>
<li>Ads revenue declined and C4Q24 guidance was below expectations. Margin improvement was mainly achieved through personnel cuts, which we think is not sustainable. AI didn’t contribute materially to revenues;</li>
<li>We see no return to growth from any of the business lines. We keep our SELL rating and cut the TP from US$84 to US$78.</li>
</ul>


BIDU reported C3Q24 top line, non-GAAP operating profit and GAAP net income in-line, 4.6% and 66% vs. our estimate and in-line, 8.7% and 46% vs. consensus.
Ads revenue declined and C4Q24 guidance was below expectations. Margin improvement was mainly achieved through personnel cuts, which we think is not sustainable. AI didn’t contribute materially to revenues;
We see no return to growth from any of the business lines. We keep our SELL rating and cut the TP from US$84 to US$78.


[Baidu, Inc. (BIDU US, SELL, TP US$78) TP Change]: C3Q24 Review: No Respite in Going Ex-Growth