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

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HK:9888

Baidu, Inc. Class A

(9888)

Rating:79Outperform
Price Target:
HK$99.00
▲(11.30%Upside)
Baidu, Inc. scores well due to its strong financial performance and undervaluation, supported by robust growth in its AI Cloud segment and strategic advancements. However, concerns about cash flow constraints and declining traditional revenue streams temper the overall outlook.
Positive Factors
AI Investment Impact
Baidu's commitment to higher investment in AI is projected to significantly boost its cloud revenue growth, expected to rise from 20% to 26% year-over-year.
Cloud Revenue Growth
Baidu's AI Ernie model enhancements have led to a remarkable 42% growth in cloud revenue, showcasing the strength of its enterprise cloud offerings.
Negative Factors
Ad Revenue Pressure
Near-term ad revenue remains under pressure due to macroeconomic uncertainty and AI search upgrades, affecting Baidu's core online marketing business.
AI Monetisation Uncertainty
The company lacks a clear AI monetisation plan, leading to a cautious market outlook and a HOLD recommendation.
Earnings Decline
Baidu's 3Q24 core earnings dropped by 19% year-over-year, falling 5% below market expectations, largely due to an increased decline in online marketing revenue.

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, where businesses pay for advertising on Baidu's platforms, leveraging its search engine's massive user base for visibility and customer acquisition. The company's advertising services include pay-for-performance services and other marketing offerings. Additionally, Baidu has been expanding its revenue streams by investing in artificial intelligence and cloud computing, offering AI solutions and cloud-based services to enterprises. Partnerships and collaborations in the autonomous driving and smart device sectors also contribute to Baidu's revenue, as it commercializes its AI technologies and products.

Baidu, Inc. Class A Earnings Call Summary

Earnings Call Date:May 21, 2025
(Q1-2025)
|
% Change Since: 1.31%|
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, Inc. presents a strong financial position with solid margins and profitability in the income statement and a stable balance sheet with low leverage. While the cash flow situation shows potential constraints, the company's overall financial health is robust. Continued focus on cash flow improvements could further enhance financial resilience.
Income Statement
85
Very Positive
Baidu, Inc. shows a strong income statement performance with a consistent revenue base and improving profitability. The gross profit margin for the TTM is 49.06%, reflecting efficient cost management. The net profit margin has increased to 19.41% from 17.84% in the previous annual report, indicating improved net income relative to revenue. Revenue growth was modest but steady. The EBIT margin improved significantly compared to historical losses, now at 15.13%, and the EBITDA margin is 25.45%, highlighting strong operational efficiencies.
Balance Sheet
80
Positive
The balance sheet demonstrates stability with a healthy equity ratio of 59.41%, indicating robust equity financing relative to assets. The debt-to-equity ratio is 0.38, suggesting a conservative leverage approach. ROE is 9.65%, reflecting decent returns for equity holders. Overall, the balance sheet is strong with substantial equity and manageable debt levels.
Cash Flow
75
Positive
Cash flow analysis shows some concerns despite overall positive cash generation. The free cash flow growth rate has slowed, highlighting potential challenges in cash generation relative to past performance. The operating cash flow to net income ratio of 0.35 indicates that a smaller portion of net income is turned into cash, which may suggest cash flow constraints. The free cash flow to net income ratio is only 0.06, highlighting low free cash flow relative to net income, possibly due to high capital expenditures.
Breakdown
Income Statement
Total Revenue
Gross Profit
EBITDA
Net Income
Balance Sheet
Total Assets
Cash, Cash Equivalents and Short-Term Investments
Total Debt
Total Liabilities
Stockholders Equity
Cash Flow
Free Cash Flow
Operating Cash Flow
Investing Cash Flow
Financing Cash Flow

Baidu, Inc. Class A Technical Analysis

Technical Analysis Sentiment
Positive
Last Price88.95
Price Trends
50DMA
85.31
Positive
100DMA
86.56
Positive
200DMA
86.56
Positive
Market Momentum
MACD
1.17
Negative
RSI
54.78
Neutral
STOCH
54.84
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For HK:9888, the sentiment is Positive. The current price of 88.95 is above the 20-day moving average (MA) of 87.10, above the 50-day MA of 85.31, and above the 200-day MA of 86.56, indicating a bullish trend. The MACD of 1.17 indicates Negative momentum. The RSI at 54.78 is Neutral, neither overbought nor oversold. The STOCH value of 54.84 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive 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 (62)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
79
Outperform
HK$249.49B9.059.84%-1.73%32.35%
62
Neutral
$41.98B-1.92-12.06%3.47%2.10%-71.01%
$642.77B23.1921.25%0.01%
$4.05B27.70-1.14%
79
Outperform
HK$236.09B25.1314.34%0.84%4.16%82.42%
78
Outperform
HK$314.15B19.0425.82%9.42%33.34%
74
Outperform
HK$19.59B7.6110.79%8.02%0.43%21.65%
* Communication Services Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
HK:9888
Baidu, Inc. Class A
88.95
1.80
2.07%
TCTZF
Tencent Holdings
69.79
25.59
57.90%
CHLLF
China Literature
3.27
0.15
4.81%
HK:9898
Weibo Corp Class A
80.20
26.13
48.33%
HK:1024
Kuaishou Technology Class B
72.70
30.60
72.68%
HK:1698
Tencent Music Entertainment Group Class A
84.80
30.84
57.15%

Baidu, Inc. Class A Corporate Events

Baidu, Inc. Schedules Board Meeting and Earnings Call for Q2 2025 Results
Jul 22, 2025

Baidu, Inc. has announced that its board of directors will meet on August 20, 2025, to approve the unaudited financial results for the second quarter and interim period ending June 30, 2025. The announcement will be made available on the Hong Kong Stock Exchange and the company’s website after trading hours in Hong Kong, and before the U.S. market opens. Additionally, Baidu will hold an earnings conference call on the same day to discuss the financial results, providing stakeholders with insights into the company’s performance and strategic direction.

The most recent analyst rating on (HK:9888) stock is a Buy with a HK$134.00 price target. To see the full list of analyst forecasts on Baidu, Inc. Class A stock, see the HK:9888 Stock Forecast page.

Baidu 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.

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.Date of analysis: Jul 22, 2025