Baidu Group - SW (09888.HK): Advertising demand under pressure. Proportion of generative AI in search advertising and cloud business continues to grow.
Overview: Total revenue slightly decreased compared to last year, with adjusted net income attributable to the parent reaching 5.9 billion yuan, and the adjusted net income margin stable. In Q3 2024, baidu group achieved a total revenue of 33.5 billion yuan, down 3% year-on-year. Baidu's core revenue is 265.
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In "Big Action", China Silver International has lowered the target price for Baidu (BIDU.US) to $128.01, with quarterly earnings falling short of expectations.
According to the research report by China International Capital Corporation, Baidu (BIDU.US) saw its core revenue flat year-on-year in the third quarter, leading to a 19% year-on-year decline in non-GAAP net income to 5.9 billion yuan, which was worse than expected. The institution maintains a cautious outlook on the company's advertising growth in the fourth quarter, but feels positive about the long-term profit outlook supported by generative ai, reiterating a 'buy' rating and lowering the US stock target price from $135.79 to $128.01. The institution also slightly reduced its forecast for the company's non-GAAP net profit this year by 0.5% and raised its forecast for 2025 to 2026 by 4.3% to 5.1%.
Goldman Sachs: Expects Baidu AI Cloud Q4 growth to increase to 15%, will maintain strong growth.
On November 22, Gelonghui reported that after Baidu released its third-quarter financial report, Goldman Sachs stated in its research report that Baidu has shown a strong determination to drive business transformation through ai and places great importance on user experience in ToC businesses such as search. Currently, driven by ai, Baidu's intelligent cloud is accelerating its growth, with a projected growth rate of 15% in the fourth quarter, and the proportion of ai revenue is expected to continue to grow, maintaining a strong growth momentum through 2025. Goldman Sachs noted that from a financial perspective, Baidu has stable cash flow, ample cash reserves, and in terms of business, it has a presence in ai cloud, autonomous driving, and search fields.