Baidu Group SW (09888. HK) will soon announce its performance for the third quarter of 2023. In response, Tianfeng Securities announced in a research report on Saturday that its revenue is expected to be 33.7 billion yuan,+3.6% year-on-year; Non GAAP (General Accounting Standards) achieved a profit of 5.9 billion yuan, a year-on-year increase of+0.14%.
Core business revenue slightly increased year-on-year
According to the report, Tianfeng Securities pointed out that Baidu Core's revenue in the third quarter of this year was 25.9 billion yuan, a year-on-year increase of 2.5%; Among them, online marketing revenue was 19.3 billion yuan, an increase of 3% year-on-year; Non online marketing revenue reached 6.6 billion yuan, an increase of 1% year-on-year; IQiyi's revenue reached 8 billion yuan, a year-on-year increase of 7%.
Tianfeng Securities believes that the advertising business in the third quarter was affected by the weakening macro recovery and other factors, and Baidu's core revenue growth is facing pressure in the short term. In the medium to long term, with the popularity of tourism, medical and other tracks, it is expected to achieve a rebound.
The organization claims that AI is expected to drive the company's sustainable development
ERNIE Bot, previously released by Baidu, is an AI related product. When attending the Frontier Digital Technology Innovation and Security Forum and the AI Enabling Industry Development Forum, Baidu Chief Technology Officer Wang Haifeng announced that since ERNIE Bot was opened to the whole society on August 31, the number of users has reached 70 million, 4300 scenarios and 2492 applications. PaddlePaddle and Wenxin Ecology have gathered 8 million developers, served 220000 enterprises and institutions, and created 800000 models.
Tianfeng Securities pointed out that Baidu's AI native application is a reconstruction of Baidu's existing applications, accumulating data in traditional application scenarios such as search, online storage, libraries, and maps. At the same time, the various capabilities of the AI big model after continuous iteration and upgrading are embedded in the original application, and accompanied by the emergence of new AI applications, such as GBI and Ruliu.
They also pointed out that the rich application landing scenarios will enable ERNIE Bot to have more high-quality data for iterative upgrading in the future, and ERNIE Bot's upgrading may feed back to various scenarios to optimize applications and play a flywheel effect. In addition, they also believe that the company's AI continues to empower, reshapes its core business with products and services, and establishes a first mover advantage to maintain strong competitiveness in the long term.
Institutional upgrade of Baidu rating to buy
In summary, Tianfeng Securities pointed out that due to the impact of weak consumer recovery on advertising and cloud computing businesses, it is expected that AI models will continue to be invested in the future. They have raised the rating of Baidu Group SW to 'buy', with a target price of HKD 141.
In addition, they also pointed out that the group's revenue forecast for 2023-2025 has been adjusted from 140 billion yuan, 156.1 billion yuan, and 174.9 billion yuan to 135.2 billion yuan, 146.6 billion yuan, and 162.9 billion yuan; The operating profit under non GAAP has been adjusted from RMB 24.9 billion, RMB 30 billion, and RMB 36.5 billion to RMB 27.6 billion, RMB 31.6 billion, and RMB 34 billion.