BIDU(BIDU) 招银国际·2024-07-17 02:22Investment Rating - The report maintains a "Buy" rating for Baidu with a target price of 93.15 [3][6]. Core Insights - Baidu's core business revenue growth for Q2 2024 is expected to meet the report's expectations but fall slightly short of broader market expectations due to proactive business adjustments and a soft macroeconomic environment affecting overall advertising budgets. However, these adjustments are anticipated to enhance user experience and long-term monetization prospects [2]. - The profitability of Baidu's cloud segment is expanding, driven by increased penetration of fully autonomous vehicles and the deployment of new car models, which may improve the unit economics of its Robotaxi business [2]. - The report estimates Baidu's core revenue for Q2 2024 at RMB 26.3 billion, flat year-over-year but 2.7% below Bloomberg's expectations, primarily due to advertising performance [2]. Financial Summary - For FY24E, Baidu's revenue is projected to be RMB 138.474 billion, reflecting a 2.9% year-over-year growth. Adjusted net profit is expected to be RMB 27.667 billion, a decrease of 3.8% compared to FY23A [5][10]. - The report forecasts Baidu's cloud revenue to grow by 14% year-over-year in Q2 2024, up from 12% in Q1 2024 and 5% in Q2 2023, driven by AI-related cloud revenue growth [2][10]. - The report highlights that the penetration rate of fully autonomous vehicles in Baidu's Robotaxi service has increased significantly, with over 70% of rides in Wuhan being provided by fully autonomous vehicles as of April 2024 [2]. Valuation - The SOTP (Sum of the Parts) valuation for Baidu is maintained at 69.2 per ADS, while the cloud segment is valued at $32.2 per ADS [6][7].