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Baidu, Inc. Class A (HK:9888)
:9888
Hong Kong Market

Baidu, Inc. Class A (9888) AI Stock Analysis

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HK

Baidu, Inc. Class A

(9888)

Rating:75Outperform
Price Target:
HK$97.00
▲(13.05%Upside)
Baidu's stock score is driven by solid financial performance and a compelling valuation, despite mixed technical indicators and concerns over cash flow due to high capital investments. Strong growth in AI initiatives and international expansion are positive, but declining revenues in some segments pose challenges.
Positive Factors
AI Innovation
Baidu leverages its AI Ernie model to enhance its enterprise cloud offerings and attract more enterprise users.
Cloud Business Growth
AI cloud business is the key driver, with robust cloud revenue growth of 42% driven by growth in Gen AI and foundation model-related revenue.
Negative Factors
Ad Revenue Decline
Expect persistent weakness in core ad revenue due to higher emphasis on AI search upgrade, expecting a decline in FY25.
Earnings Outlook
Cut FY25/26/27F earnings by 15%/17%/22% on gloomy outlook for core ad business with delayed AI search monetisation plan.

Baidu, Inc. Class A (9888) vs. iShares MSCI Hong Kong ETF (EWH)

Baidu, Inc. Class A Business Overview & Revenue Model

Company DescriptionBaidu, Inc. offers internet search services in China. It operates through Baidu Core and iQIYI segments. The company offers Baidu App to access search, feed, and other services using mobile devices; Baidu Search to access its search and other services; Baidu Feed that provides users with personalized timeline based on their demographics and interests; Baidu Health that helps users to find the doctor and hospital for healthcare needs; and Haokan, a short video app. It also provides Baidu Knows, an online community where users can ask questions to other users; Baidu Wiki; Baidu Experience; Baidu Post; Baidu Wenku; Baidu Maps, a voice-enabled mobile app that provides travel-related services; Baidu Drive; Baijiahao; and DuerOS, a smart assistant platform. In addition, it offers online marketing services, which include pay for performance, an auction-based services that allow customers to bid for priority placement of paid sponsored links and reach users who search for information related to their products or services; other marketing services that include display-based marketing services and other online marketing services based on performance criteria other than cost per click; mobile ecosystem, a portfolio of apps, including Baidu App, Haokan, and Baidu Post; various cloud services and solutions, such as platform as a service, software as a service, and infrastructure as a service; self-driving services, including maps, automated valet parking, navigation pilot, electric vehicles, and robotaxi fleets, as well as Xiaodu smart devices. Further, the company provides iQIYI, an online entertainment service, including original and licensed content; other video content and membership; and online advertising services. Baidu, Inc. has strategic partnership with Zhejiang Geely Holding Group. The company was formerly known as Baidu.com, Inc. Baidu, Inc. was incorporated in 2000 and is headquartered in Beijing, China.
How the Company Makes MoneyBaidu primarily generates revenue through its online marketing services, which include pay-for-performance services, where businesses pay for their advertisements to appear in Baidu's search results, and display-based marketing, where companies pay for display advertisements across Baidu's network. The company also earns from its AI cloud services, which offer cloud computing, machine learning, and data analytics solutions to businesses. Another revenue stream comes from its investments in autonomous driving and smart transportation solutions, where Baidu leverages its AI capabilities to develop technologies for self-driving cars and smart city infrastructures. Additionally, Baidu has strategic partnerships with various technology firms and service providers to enhance its service offerings and expand its market reach, contributing to its overall earnings.

Baidu, Inc. Class A Earnings Call Summary

Earnings Call Date:May 21, 2025
(Q1-2025)
|
% Change Since: -2.28%|
Next Earnings Date:Aug 20, 2025
Earnings Call Sentiment Neutral
Baidu demonstrated strong growth in its AI Cloud business, with substantial revenue increases and international expansion of its autonomous driving service, Apollo Go. However, the company faced challenges with declining online marketing revenue and negative free cash flow due to high capital investments. While the AI advancements and expansion efforts are promising, the financial pressures indicate a need for cautious optimism.
Q1-2025 Updates
Positive Updates
AI Cloud Revenue Surge
AI Cloud revenue reached RMB6.7 billion in Q1, delivering a strong year-over-year increase of 42%, demonstrating significant growth primarily driven by AI adoption across industries.
Record Growth in AI Cloud Market Share
AI Cloud accounted for 26% of Baidu Core revenue, up from 20% a year ago, reflecting the growing significance of AI Cloud in the company's business portfolio.
Advancements in AI Models
Released ERNIE 4.5 and ERNIE X1 with competitive pricing, followed by ERNIE 4.5 Turbo and ERNIE X1 Turbo with enhanced performance and significantly lower prices, showcasing rapid iteration and cost efficiency in AI model development.
Apollo Go Expansion
Apollo Go, Baidu's autonomous ride-hailing service, expanded into international markets, including Dubai and Abu Dhabi, with over 1,000 fully driverless vehicles now deployed globally.
Increase in Baidu App MAU
The MAU of Baidu App increased by 7% year-over-year, reaching 724 million, indicating strong user engagement and growth in mobile ecosystem.
Negative Updates
Decline in Online Marketing Revenue
Baidu Core's online marketing revenue was RMB16.0 billion, decreasing 6% year-over-year, indicating a downturn in traditional advertising revenue.
iQIYI Revenue Decline
Revenue from iQIYI was RMB7.2 billion, decreasing 9% year-over-year, highlighting challenges in maintaining growth in the video streaming segment.
Negative Free Cash Flow
Free cash flow was negative RMB8.9 billion, mainly due to increased investments in AI business, indicating significant capital expenditure impacting cash reserves.
Company Guidance
During Baidu's first quarter 2025 earnings call, the company provided several key metrics and guidance on its performance and strategic priorities. Baidu Core’s total revenue reached RMB25.5 billion, marking a 7% year-over-year increase, primarily driven by the AI Cloud business, which saw a 42% year-over-year revenue growth to RMB6.7 billion. This accounted for 26% of Baidu Core revenue, up from 20% a year ago. The company's ongoing AI transformation was highlighted by the release of ERNIE 4.5 and ERNIE X1 models, with plans to open source the ERNIE 4.5 series by June 30, 2025. In AI Cloud, Baidu emphasized the strength of its MaaS platform, Qianfan, which offers a comprehensive model library and industry-leading cost-effectiveness. For its autonomous driving service, Apollo Go, Baidu reported significant advancements in international markets, including Dubai and Abu Dhabi, with a global deployment of over 1,000 fully driverless vehicles. Financially, Baidu reported a total revenue of RMB32.5 billion, a 3% year-over-year increase, with a net income attributable to Baidu of RMB7.7 billion and a non-GAAP net income of RMB6.5 billion. The company also highlighted its robust share repurchase program, having repurchased $445 million of shares since the beginning of the first quarter, reflecting its commitment to returning value to shareholders.

Baidu, Inc. Class A Financial Statement Overview

Summary
Baidu's financial performance is solid with consistent revenue growth and improving profitability metrics. The balance sheet is strong, though debt levels should be monitored. Cash flow is robust but the negative free cash flow due to high capital investments needs attention.
Income Statement
78
Positive
Baidu has demonstrated consistent revenue growth, with a slight dip in 2024. The gross profit and net profit margins are strong, reflecting effective cost management. The company has shown improvement in EBIT and EBITDA margins over the years, indicating enhanced operational efficiency. However, the recent slight decline in revenue warrants attention.
Balance Sheet
72
Positive
The company maintains a healthy equity base with a favorable equity ratio, suggesting strong asset backing. The debt-to-equity ratio indicates moderate leverage, which is manageable but should be monitored. ROE shows improvement, reflecting better utilization of equity, yet there's room for further enhancement in profitability.
Cash Flow
75
Positive
Baidu's cash flow generation is robust, with a solid operating cash flow to net income ratio, signifying strong cash conversion. The free cash flow has shown fluctuations but remains positive, indicating good liquidity management. The free cash flow growth rate needs improvement to ensure sustained financial flexibility.
Breakdown
Dec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income StatementTotal Revenue
133.13B134.60B123.67B124.49B107.07B
Gross Profit
67.02B69.57B59.74B60.18B51.92B
EBIT
21.27B21.86B-5.58B-8.46B-8.37B
EBITDA
35.95B36.53B14.51B14.10B14.34B
Net Income Common Stockholders
23.76B20.32B7.56B7.59B22.47B
Balance SheetCash, Cash Equivalents and Short-Term Investments
127.44B193.90B174.00B180.09B162.18B
Total Assets
427.78B406.76B390.97B380.03B332.71B
Total Debt
79.32B84.59B91.35B91.51B82.59B
Net Debt
54.49B59.36B38.20B54.66B46.81B
Total Liabilities
144.17B144.15B153.17B156.08B140.87B
Stockholders Equity
263.62B243.63B223.48B211.46B182.70B
Cash FlowFree Cash Flow
13.10B25.32B17.78B8.88B18.87B
Operating Cash Flow
21.23B36.62B26.17B20.12B24.20B
Investing Cash Flow
-8.55B-50.40B-3.94B-31.44B-27.55B
Financing Cash Flow
-13.76B-14.16B-6.39B23.40B5.67B

Baidu, Inc. Class A Technical Analysis

Technical Analysis Sentiment
Neutral
Last Price85.80
Price Trends
50DMA
84.65
Positive
100DMA
86.54
Negative
200DMA
86.53
Negative
Market Momentum
MACD
-0.05
Negative
RSI
51.09
Neutral
STOCH
79.52
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For HK:9888, the sentiment is Neutral. The current price of 85.8 is above the 20-day moving average (MA) of 84.12, above the 50-day MA of 84.65, and below the 200-day MA of 86.53, indicating a neutral trend. The MACD of -0.05 indicates Negative momentum. The RSI at 51.09 is Neutral, neither overbought nor oversold. The STOCH value of 79.52 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for HK:9888.

Baidu, Inc. Class A Risk Analysis

Baidu, Inc. Class A disclosed 108 risk factors in its most recent earnings report. Baidu, Inc. Class A reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks

Baidu, Inc. Class A Peers Comparison

Overall Rating
UnderperformOutperform
Sector (61)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
75
Outperform
HK$243.31B8.739.84%-1.73%32.35%
61
Neutral
$14.75B5.86-3.99%6.11%2.67%-30.24%
$109.75B19.1023.82%
$178.79B39.8014.98%
84
Outperform
HK$421.17B8.3819.79%22.77%7.67%90.63%
81
Outperform
HK$2.26T15.9213.02%2.74%3.92%27.80%
80
Outperform
HK$267.63B15.3325.82%9.42%33.34%
* Communication Services Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
HK:9888
Baidu, Inc. Class A
85.80
-5.80
-6.33%
MPNGF
Meituan
17.62
3.10
21.35%
XIACF
Xiaomi
6.61
4.41
200.45%
HK:9618
JD.com, Inc. Class A
129.80
18.78
16.92%
HK:9988
Alibaba Group Holding Ltd.
112.00
40.40
56.42%
HK:1024
Kuaishou Technology Class B
58.00
7.05
13.84%

Baidu, Inc. Class A Corporate Events

Baidu Reports Strong Q1 2025 Results with AI Cloud Surge and Robotaxi Expansion
May 21, 2025

Baidu, Inc. announced its unaudited financial results for the first quarter of 2025, highlighting a 7% year-over-year growth in Baidu Core revenue, driven by a 42% increase in AI Cloud services. The company also achieved a significant milestone by expanding its Apollo Go robotaxi service to Dubai and Abu Dhabi, reinforcing its commitment to global markets. The results underscore Baidu’s strategic focus on AI, positioning it for long-term growth opportunities in the AI era.

The most recent analyst rating on (HK:9888) stock is a Hold with a HK$85.00 price target. To see the full list of analyst forecasts on Baidu, Inc. Class A stock, see the HK:9888 Stock Forecast page.

Baidu, Inc. Announces Annual General Meeting for June 2025
May 8, 2025

Baidu, Inc. has announced the scheduling of its annual general meeting of shareholders, which will be held on June 27, 2025, at its campus in Beijing. The meeting will not include any proposals for shareholder approval, and the company has set May 27, 2025, as the record date for determining shareholder eligibility to attend. This announcement is part of Baidu’s ongoing corporate governance practices, ensuring transparency and engagement with its shareholders.

Baidu, Inc. Schedules Q1 2025 Financial Results Announcement and Conference Call
Apr 22, 2025

Baidu, Inc. has announced a board meeting scheduled for May 20, 2025, to approve its unaudited financial results for the first quarter of 2025. The results will be made available on May 21, 2025, after trading hours in Hong Kong and before the U.S. market opens. The company will also hold an earnings conference call on the same day, providing stakeholders with insights into its financial performance and strategic direction.

Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.