BIDU(BIDU) 交银国际证券·2024-12-12 02:35Investment Rating - The report maintains a "Buy" rating for Baidu (BIDU US) with a target price adjusted to 89.21 [6]. Core Insights - Baidu's advertising business is expected to face short-term pressure, with a focus on the progress of AI search monetization in 2025. The negative impact of search transformation on traditional advertising revenue is anticipated to persist for several quarters [1][2]. - The report highlights that Baidu's core advertising revenue is projected to decline by approximately 7.8% year-on-year in 2024, with a further decline expected in the first quarter of 2025 [1][2]. - The company is expected to experience a shift in revenue structure, with advertising revenue growth under pressure while cloud services continue to contribute positively, albeit at lower profit margins compared to advertising [1][2]. Financial Projections - Baidu's core revenue is forecasted to be RMB 132,538 million in 2024, with a slight decrease of 0.2% compared to previous estimates. The revenue is expected to grow to RMB 143,100 million by 2026 [2]. - The adjusted operating profit for 2024 is projected at RMB 26,711 million, reflecting a decrease of 3.4% from prior estimates, with an operating margin of 20.2% [2]. - The adjusted net profit is expected to be RMB 24,757 million in 2024, down 3.4% from previous forecasts, with a net profit margin of 18.7% [2]. Revenue Breakdown - The report provides a detailed breakdown of Baidu's revenue sources, with online marketing services expected to generate RMB 72,600 million in 2024, while cloud services are projected to reach RMB 20,989 million [2]. - The revenue from autonomous driving and new businesses is anticipated to be RMB 10,509 million in 2025, indicating growth potential in these segments [2]. Market Context - Baidu's valuation remains below industry averages, with a price-to-earnings ratio of 9 times for 2025, suggesting potential for upward adjustment as the market stabilizes [1][2]. - The report emphasizes the importance of monitoring the monetization progress of AI initiatives, which could significantly impact Baidu's future revenue streams [1][2].