BIDU(09888) 东吴证券·2024-08-28 03:37Investment Rating - The investment rating for Baidu Group-SW is "Buy" (maintained) [1] Core Insights - The company's revenue for Q2 2024 was slightly below market expectations, while the adjusted net profit exceeded market expectations. The revenue was 33.9 billion yuan, a year-on-year decrease of 0.36%, and the Non-GAAP net profit was 7.4 billion yuan, down 8% year-on-year but better than Bloomberg consensus [3][4] - The advertising business continues to face external pressures, with internal generative AI transformations impacting short-term monetization efficiency. Core revenue for Q2 was 26.7 billion yuan, a year-on-year increase of 1%, with online marketing revenue at 19.2 billion yuan, down 2% year-on-year [3][4] - Non-advertising business is driven by generative AI, particularly in cloud computing, which saw a 14% year-on-year growth in revenue for Q2. The generative AI and foundational model revenue continued to grow significantly, accounting for 9% of cloud revenue in Q2 [4] - Despite increased investments in generative AI, strict cost control has improved profitability, with Non-GAAP gross margin and operating margin at 59.6% and 26.2%, respectively, both better than Bloomberg consensus [4] Financial Forecasts - The revenue forecast for Baidu Group for 2024 is 134.03 billion yuan, with a slight decrease of 0.42% compared to 2023. The Non-GAAP net profit is projected to be 29.03 billion yuan, with a growth rate of 0.97% [2][8] - The company has adjusted its Non-GAAP net profit forecasts for 2024-2026 from 29.8 billion, 31.8 billion, and 34.1 billion yuan to 29.0 billion, 30.4 billion, and 32.6 billion yuan, respectively [8]