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>We attended 2023 Baidu World Conference on 17 Oct. Our key takeaways are: 1) Baidu unveiled the 4.0 version of Ernie large language model (LLM) and is integrating generative AI across all products to enhance user experience, which shall enhance Baidu’s monetization capability over the long-run, in our view; 2) Baidu Cloud has accumulated strong AI infrastructure, which enables more cost-efficient solutions to ease computing power cost pressure.</li><li>Although macro headwinds may weigh on short-term revenue growth of both ads and cloud businesses, and additional investment to support large-scale use of LLM may squeeze margins, we are more positive on the long-term development prospects of Baidu aided by the on-track development of LLM.</li><li>To account for short-term macro headwinds on its business, we fine-tune our SOTP-based TP to US$199.4 (was US$201.0). Maintain BUY.</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 attended 2023 Baidu World Conference on 17 Oct. Our key takeaways are: 1) Baidu unveiled the 4.0 version of Ernie large language model (LLM) and is integrating generative AI across all products to enhance user experience, which shall enhance Baidu’s monetization capability over the long-run, in our view; 2) Baidu Cloud has accumulated strong AI infrastructure, which enables more cost-efficient solutions to ease computing power cost pressure.Although macro headwinds may weigh on short-term revenue growth of both ads and cloud businesses, and additional investment to support large-scale use of LLM may squeeze margins, we are more positive on the long-term development prospects of Baidu aided by the on-track development of LLM.To account for short-term macro headwinds on its business, we fine-tune our SOTP-based TP to US$199.4 (was US$201.0). Maintain BUY.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) – Takeaway from 2023 Baidu World Conference

<ul><li>Baidu announced (22 Aug) its 2Q23 results: revenue was RMB34.1bn, up 15% YoY, 1/2% higher than our forecast/Bloomberg consensus estimates.</li><li>NonGAAP net income was RMB8.0bn, ahead of our forecast/Bloomberg consensus estimates at RMB6.1/5.9bn, driven by stronger than expected revenue growth of high-margin Baidu Core ads business, and one-off foreign exchange gain.</li><li>We lift our SOTP based TP by 3% to US$201.0 to reflect better than expected recovery of core ads business. </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 (22 Aug) its 2Q23 results: revenue was RMB34.1bn, up 15% YoY, 1/2% higher than our forecast/Bloomberg consensus estimates.NonGAAP net income was RMB8.0bn, ahead of our forecast/Bloomberg consensus estimates at RMB6.1/5.9bn, driven by stronger than expected revenue growth of high-margin Baidu Core ads business, and one-off foreign exchange gain.We lift our SOTP based TP by 3% to US$201.0 to reflect better than expected recovery of core ads business. 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) – Monetization of LLM the Next Key to Watch

<ul><li>Driven by recovery in offline activities and a low base, Baidu’s advertising business is on track to deliver steady recovery in 2Q23, in our view.</li><li>Cloud business revenue growth re-acceleration could take time, due to softness in demand and strategically focusing more on quality growth.</li><li>We lowered our SOTP based target price by 2% to US$195.0 mainly to account for slower than expected recovery for cloud revenue growth.</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.

Driven by recovery in offline activities and a low base, Baidu’s advertising business is on track to deliver steady recovery in 2Q23, in our view.Cloud business revenue growth re-acceleration could take time, due to softness in demand and strategically focusing more on quality growth.We lowered our SOTP based target price by 2% to US$195.0 mainly to account for slower than expected recovery for cloud revenue growth.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) – Recovery of Advertising Business on Track

<ul><li>We took an Apollo field trip and hosted a group meeting with Baidu.</li><li>Our key takeaways are as follows: 1) recovery of ads business in 2Q23 is on track aided by the recovery of offline activities, and management remains upbeat on achieving better than GDP growth for ads business in 2023; 2) management believes Ernie Bot has achieved early-mover advantage and noted the Company is well prepared for monetization once received regulatory approval for large scale use; 3) regarding robotaxi, fully driverless ride hailing services are currently available in three cities, and management expects monetization to be more materialize with more license approvals and cost optimization in the coming years.</li><li>Reiterate BUY with SOTP-based target price of US$199.4. Key catalysts include: 1) better than expected recovery of advertising business; 2) kick in of monetization for Ernie Bot; and 3) sooner and greater than expected revenue contribution from Apollo Self Driving (ASD).</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 took an Apollo field trip and hosted a group meeting with Baidu.Our key takeaways are as follows: 1) recovery of ads business in 2Q23 is on track aided by the recovery of offline activities, and management remains upbeat on achieving better than GDP growth for ads business in 2023; 2) management believes Ernie Bot has achieved early-mover advantage and noted the Company is well prepared for monetization once received regulatory approval for large scale use; 3) regarding robotaxi, fully driverless ride hailing services are currently available in three cities, and management expects monetization to be more materialize with more license approvals and cost optimization in the coming years.Reiterate BUY with SOTP-based target price of US$199.4. Key catalysts include: 1) better than expected recovery of advertising business; 2) kick in of monetization for Ernie Bot; and 3) sooner and greater than expected revenue contribution from Apollo Self Driving (ASD).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) – Takeaway from Field Trip

<ul><li>Baidu announced (16 May) its 1Q23 results: quarterly revenue was RMB31.1bn, up 9.6% YoY, 5/4% higher than our forecast/Bloomberg consensus estimates.</li><li>Non-GAAP net income was RMB5.3bn, higher than our forecast/Bloomberg consensus estimates at RMB4.2/4.3bn, driven by stronger than expected recovery of ads business, and better than expected margin expansion of cloud business, which achieved profitability on non-GAAP operating profit level.</li><li>The ongoing recovery in offline activities is likely to benefit Baidu more than its peers given its relatively greater exposure in offline ads categories, and Baidu’s strategy to drive for quality growth for cloud business likely aids a continuous margin expansion for cloud business in the medium term.</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 (16 May) its 1Q23 results: quarterly revenue was RMB31.1bn, up 9.6% YoY, 5/4% higher than our forecast/Bloomberg consensus estimates.Non-GAAP net income was RMB5.3bn, higher than our forecast/Bloomberg consensus estimates at RMB4.2/4.3bn, driven by stronger than expected recovery of ads business, and better than expected margin expansion of cloud business, which achieved profitability on non-GAAP operating profit level.The ongoing recovery in offline activities is likely to benefit Baidu more than its peers given its relatively greater exposure in offline ads categories, and Baidu’s strategy to drive for quality growth for cloud business likely aids a continuous margin expansion for cloud business in the medium term.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) – Cloud business turned profitable

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) – Takeaway from 2023 Baidu World Conference

To account for short-term macro headwinds on its business, we fine-tune our SOTP-based TP to US$199.4 (was US$201.0). Maintain BUY.

CMB International

Baidu (BIDU US) – Monetization of LLM the Next Key to Watch

aidu announced (22 Aug) its 2Q23 results: revenue was RMB34.1bn, up 15% YoY, 1/2% higher than our forecast/Bloomberg consensus estimates.

CMB International

Baidu (BIDU US) – Recovery of Advertising Business on Track

Driven by recovery in offline activities and a low base, Baidu’s advertising business is on track to deliver steady recovery in 2Q23, in our view.

CMB International

Baidu (BIDU US) – Takeaway from Field Trip

Recovery of ads business in 2Q23 is on track aided by the recovery of offline activities, and management remains upbeat on achieving better than...

CMB International

Baidu (BIDU US) – Cloud business turned profitable

Baidu announced (16 May) its 1Q23 results: quarterly revenue was RMB31.1bn, up 9.6% YoY, 5/4% higher than our forecast/Bloomberg consensus estimates.

CMB International