External broker reports(aggregated public sources), CMB International

CMB International

External broker reports(aggregated public sources)

Incorporated in Hong Kong, supported by the mainland and targeting in global market, CMB International Capital Corporation Limited (“CMBI”) is an integrated financial institution providing comprehensive and professional services. As a wholly-owned subsidiary of China Merchants Bank ("CMB"), by leveraging on the Group’s synergy and coordination in domestic and overseas markets, as well as CMB’s strong resources and outstanding social reputation, CMBI and its subsidiaries have been actively implementing diversified business strategies and set up an overall layout of main business segments including Corporate Finance, Asset Management, Wealth Management, Global Markets and Structured Finance, etc. Adhering to the philosophy of “being clients oriented and increasing our own values by the way of creating value for clients”, CMBI endeavors to provide quality and integrated financial services to institutional, corporate and individual customers both domestic and overseas including Hong Kong IPO sponsorship and underwriting, share placement and rights issue for listed companies, financial advisors, bonds issuance services, asset management, direct investment, wealth management, equity sales and trading, etc.

Equity Bottom-Up

<ul><li>Baidu announced (18 Feb) 4Q24 results: Baidu Core revenue was RMB27.7bn, 3.5% better than Bloomberg consensus estimates; non-GAAP OP of Baidu Core reached RMB4.6bn in 4Q24, 1% ahead of consensus.</li><li>For 2024, Baidu Core revenue totalled RMB104.7bn, up 1.3% YoY, and non-GAAP OP was RMB23.9bn, down 3% YoY.</li><li>Driven by both strong AI-related GPU cloud revenue growth, as well as cross-selling from GPU cloud to CPU cloud and other cloud services, the 26% YoY growth in cloud services revenue was a solid beat to consensus, and we believe the growth trend of cloud business could sustain in 2025E. </li></ul>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Baidu announced (18 Feb) 4Q24 results: Baidu Core revenue was RMB27.7bn, 3.5% better than Bloomberg consensus estimates; non-GAAP OP of Baidu Core reached RMB4.6bn in 4Q24, 1% ahead of consensus.For 2024, Baidu Core revenue totalled RMB104.7bn, up 1.3% YoY, and non-GAAP OP was RMB23.9bn, down 3% YoY.Driven by both strong AI-related GPU cloud revenue growth, as well as cross-selling from GPU cloud to CPU cloud and other cloud services, the 26% YoY growth in cloud services revenue was a solid beat to consensus, and we believe the growth trend of cloud business could sustain in 2025E. Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Baidu (BIDU US) - Solid Cloud Revenue Growth a Bright Spot

<ul><li>For 4Q24E, we are looking for 4.8% YoY decline in total revenue (1% lower than consensus), and RMB4.7bn non-GAAP net income for Baidu, owing to one-off impact from equity investee.</li><li>Cloud revenue growth likely remains a bright spot aided by strong demand in GPU cloud, while pace of ads rev growth recovery remains a key to watch.</li><li>We lowered our SOTP-based target price by 6% to US$144.6 to factor in more tepid-than-expected ads business recovery. </li></ul>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

For 4Q24E, we are looking for 4.8% YoY decline in total revenue (1% lower than consensus), and RMB4.7bn non-GAAP net income for Baidu, owing to one-off impact from equity investee.Cloud revenue growth likely remains a bright spot aided by strong demand in GPU cloud, while pace of ads rev growth recovery remains a key to watch.We lowered our SOTP-based target price by 6% to US$144.6 to factor in more tepid-than-expected ads business recovery. Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Baidu (BIDU US) - Solid Cloud Revenue Growth a Bright Spot in the Stage of Business Adjustment

<ul><li>Baidu announced (21 Nov) its 3Q24 results: total revenue was RMB33.6bn, inline with both our forecast and Bloomberg consensus; excluding one-off foreign exchange loss of RMB1.1bn, non-GAAP net income would be RMB7.0bn, better than consensus of RMB6.2bn.</li><li>Non-GAAP OP of Baidu Core reached RMB6.7bn, 1%/4% better than our forecast/ consensus, thanks to more optimized than expected R&amp;D spending.</li><li>Monetization of Gen-AI related initiative likely still takes time, and we expect Baidu to still prioritize product enhancement and user engagement improvement over monetization in 4Q24- 1Q25, while we concur that the related investment in driving for business transformation is vital for Baidu’s long-term business development. </li></ul>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Baidu announced (21 Nov) its 3Q24 results: total revenue was RMB33.6bn, inline with both our forecast and Bloomberg consensus; excluding one-off foreign exchange loss of RMB1.1bn, non-GAAP net income would be RMB7.0bn, better than consensus of RMB6.2bn.Non-GAAP OP of Baidu Core reached RMB6.7bn, 1%/4% better than our forecast/ consensus, thanks to more optimized than expected R&amp;D spending.Monetization of Gen-AI related initiative likely still takes time, and we expect Baidu to still prioritize product enhancement and user engagement improvement over monetization in 4Q24- 1Q25, while we concur that the related investment in driving for business transformation is vital for Baidu’s long-term business development. Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Baidu (BIDU US) - Pace of Ads Rev Growth Recovery Key to Watch

<ul><li>We expect Baidu Core business to deliver broadly inline-with-consensus revenue, and slightly better-than-consensus non-GAAP operating profit for 3Q24E.</li><li>Although proactive business adjustments to embed more GenAI-related results in search results weigh on short-term monetization, we view the adjustments as vital for Baidu’s long-term business development and monetization improvement, and expect better visibility on ads revenue growth to be one of the key catalysts for stock price.</li><li>We see additional catalysts to come from: 1) more rapid-than-expected expansion of Robotaxi business; 2) more rapid-than-expected commercialization from GenAI-related initiatives; and 3) enhancement of shareholder return. </li></ul>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

We expect Baidu Core business to deliver broadly inline-with-consensus revenue, and slightly better-than-consensus non-GAAP operating profit for 3Q24E.Although proactive business adjustments to embed more GenAI-related results in search results weigh on short-term monetization, we view the adjustments as vital for Baidu’s long-term business development and monetization improvement, and expect better visibility on ads revenue growth to be one of the key catalysts for stock price.We see additional catalysts to come from: 1) more rapid-than-expected expansion of Robotaxi business; 2) more rapid-than-expected commercialization from GenAI-related initiatives; and 3) enhancement of shareholder return. Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Baidu (BIDU US) - Awaiting Recovery of Ads Revenue Growth

Thematic (Sector/Industry)

<ul><li>We update our sector investment views for the next six months post earnings as follows: 1) Companies with solid fundamentals and high revenue and profit growth visibility; 2) sustained profitability and willingness to lift shareholder returns; and 3) a sizeable TAM for new initiatives and business explorations likely to generate a decent ROIC.</li><li>We believe the market will continue to allocate to such names and value them fairly.</li><li>Taking into account 2Q results and recent stock performances, we find our previous view has been testified: better-than-expected earnings are not enough to drive a share rally, but better-than-expected 3Q/full-year outlook and enhanced shareholder return measures could provide key support. </li></ul>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

We update our sector investment views for the next six months post earnings as follows: 1) Companies with solid fundamentals and high revenue and profit growth visibility; 2) sustained profitability and willingness to lift shareholder returns; and 3) a sizeable TAM for new initiatives and business explorations likely to generate a decent ROIC.We believe the market will continue to allocate to such names and value them fairly.Taking into account 2Q results and recent stock performances, we find our previous view has been testified: better-than-expected earnings are not enough to drive a share rally, but better-than-expected 3Q/full-year outlook and enhanced shareholder return measures could provide key support. Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Internet - 2Q24 Recap & Stock-Picking Ideas: Seeking Certainty

China

Baidu, Inc. operates an Internet search engine. The Company offers algorithmic search, enterprise search, news, MP3, and image searches, voice assistance, online storage, and navigation services. Baidu serves clients globally.

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Baidu (BIDU US)

Baidu (BIDU US) - Solid Cloud Revenue Growth a Bright Spot

Baidu Core revenue was RMB27.7bn, 3.5% better than Bloomberg consensus estimates; non-GAAP OP of Baidu Core reached RMB4.6bn in 4Q24, 1% ahead of...

CMB International

Baidu (BIDU US) - Solid Cloud Revenue Growth a Bright Spot in the Stage of Business Adjustment

For 4Q24E, we are looking for 4.8% YoY decline in total revenue (1% lower than consensus), and RMB4.7bn non-GAAP net income for Baidu, owing to one...

CMB International

Baidu (BIDU US) - Pace of Ads Rev Growth Recovery Key to Watch

We cut our SOTP-based TP by 7% to US$153.6 (was US$164.8) to reflect fine-tuned outlook on ads revenue growth recovery. Maintain BUY.

CMB International

Baidu (BIDU US) - Awaiting Recovery of Ads Revenue Growth

We expect Baidu Core business to deliver broadly inline-with-consensus revenue, and slightly better-than-consensus non-GAAP operating profit for...

CMB International

Internet - 2Q24 Recap & Stock-Picking Ideas: Seeking Certainty

We update our sector investment views for the next six months post earnings as follows: 1) Companies with solid fundamentals and high revenue and...

CMB International

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