China/Asia TMT

Shawn Yang

China growth and global non-US Internet equities

Blue Lotus Research Institute

Blue Lotus Research is a Hong Kong Type 4 Licensed investment advisory firm focusing on Chinese growth equities and global non-US Internet equities

Equity Bottom-Up

<ul>
<li>Baidu reported 2Q23 revenue/non-GAAP net income 2.3%/38.1% vs cons., Baidu core’s online marketing revenues and other revenues grew 7.1%/13.0% YoY, respectively. </li>
<li>We expect that Baidu’s ads growth will continue into 2H23, supported by recovery of key advertisers. </li>
<li>We slightly increase FY23 EPS estimates and maintain our TP of US$162, which implies 17.8X PE.</li>
</ul>


Baidu reported 2Q23 revenue/non-GAAP net income 2.3%/38.1% vs cons., Baidu core’s online marketing revenues and other revenues grew 7.1%/13.0% YoY, respectively. 
We expect that Baidu’s ads growth will continue into 2H23, supported by recovery of key advertisers. 
We slightly increase FY23 EPS estimates and maintain our TP of US$162, which implies 17.8X PE.


[Baidu (BIDU US, BUY, TP US$162) Earnings Review]: Online Ads Growth Will Remain Robust

Blue Lotus Non US Internet research, Blue Lotus Research Institute

Ying Pan

Blue Lotus Non US Internet research

Thematic (Sector/Industry)

<ul>
<li>NTES US : NetEase's &lt;Marvel Rivals&gt; has commenced its first round of testing, with players providing positive feedback.（+）</li>
<li>4689 JP/4755 JP/4385 JP: PayPay QR-code system crashed for three hours (-/+/+)</li>
<li>BABA US /BIDU US/700 HK: China's generative AI starts price war mode, led by ByteDance and High-Flyer（/////）</li>
</ul>


NTES US : NetEase's &lt;Marvel Rivals&gt; has commenced its first round of testing, with players providing positive feedback.（+）
4689 JP/4755 JP/4385 JP: PayPay QR-code system crashed for three hours (-/+/+)
BABA US /BIDU US/700 HK: China's generative AI starts price war mode, led by ByteDance and High-Flyer（/////）


[Blue Lotus Daily - TMT Update]:NTES US/4689 JP/4755 JP/4385 JP/BABA US /BIDU US/700 HK

<ul>
<li>We estimate Baidu's ads revenue growth in 2Q23 will be 10.8% YoY. We largely cut our forecast of 3Q23’s ads revenue growth from 14.7% to 7.1%.</li>
<li>We lower Baidu's core other revenue growth in 2Q23 from 18.0% to 9.0% YoY. Baidu’s smart transportation AI cloud business has been affected by the contraction in local government expenses.</li>
<li>We expect Baidu's 2Q23’s rev./non-GAAP net income to be (2.3%)/ (1.9%) vs cons, also cut the TP to $162, which implies 16.5X PE in 2023.</li>
</ul>


We estimate Baidu's ads revenue growth in 2Q23 will be 10.8% YoY. We largely cut our forecast of 3Q23’s ads revenue growth from 14.7% to 7.1%.
We lower Baidu's core other revenue growth in 2Q23 from 18.0% to 9.0% YoY. Baidu’s smart transportation AI cloud business has been affected by the contraction in local government expenses.
We expect Baidu's 2Q23’s rev./non-GAAP net income to be (2.3%)/ (1.9%) vs cons, also cut the TP to $162, which implies 16.5X PE in 2023.


[Baidu, Inc. (BIDU US, BUY, TP US$162) TP Change]: Cut TP Due to Weaker Outlook in Ads and Cloud

Independent research on the U.S. markets, Baptista Research

Baptista Research

Independent research on the U.S. markets

Baptista Research is an independent financial research house focused on the U.S. markets. We provide equity research as well as credit research reports on the top-listed U.S. companies with most of our focus on technology, consumer goods and services, automobiles, industrials, oil and gas, pharma, and healthcare. Our research has served more than 3000 institutional investors including mutual funds, hedge funds, banks, family offices, and various buy-side firms. We operate a research subscription service where institutions, as well as retail investors, can have priority access to all our research. We also have a wide distribution of our research reports across some of the top global financial platforms. Apart from equity research and credit research, we also provide advisory services with respect to mergers & acquisitions (M&A), private equity/ venture capital fundraising, valuation reports, and investment management services for corporates.
Baptista Research is owned and managed by Ishan Majumdar, an ex-Venture Capitalist/ Investment Banker, a Chartered Accountant, and a Masters’ degree holder in Management from HEC Paris. Ishan has nearly a decade of experience in Mergers and Acquisitions, Leveraged Buyouts (LBOs), Venture Capital Investing, Corporate Strategy, and Valuation in front-office roles at the likes of BNP Paribas CIB, Credit Agricole CIB, Groupe Danone, and TIW Private Equity. He has worked on and closed multiple acquisition deals, leveraged buyouts, and start-up investment transactions.

<ul><li>Baidu managed to surpass the revenue expectations as well as the earnings expectations of Wall Street.</li><li>Baidu Core's revenue growth reaccelerated year-on-year in Q1, supported by an improvement in operating margin and a positive impact from China's overall economic recovery.</li><li>In Q1, Baidu reported revenue growth for AI Cloud, solid progress in the Intelligent Driving sector, and positive year-over-year growth in online marketing revenue for the Mobile Ecosystem.</li></ul>

Baidu managed to surpass the revenue expectations as well as the earnings expectations of Wall Street.Baidu Core's revenue growth reaccelerated year-on-year in Q1, supported by an improvement in operating margin and a positive impact from China's overall economic recovery.In Q1, Baidu reported revenue growth for AI Cloud, solid progress in the Intelligent Driving sector, and positive year-over-year growth in online marketing revenue for the Mobile Ecosystem.

Baidu Inc.: AI Cloud Profitability Is A Breath Of Fresh Air – Key Drivers

Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

<ul>
<li>Seeing as though it is Chinese New Year week, I thought it might be appropriate to conduct a brief analysis of US-listed China plays.</li>
<li>According to a recent US-China Economic and Security Review Commission report, 265 Chinese companies were listed on the NYSE, Nasdaq and NYSE American exchanges in January 2024 worth US$848bn. </li>
<li>That's down from 252 companies worth US$1.03tn a year ago, a 17.5% decline. 91% of the total market capitalization of Chinese firms listed on U.S. exchanges use VIEs.</li>
</ul>


Seeing as though it is Chinese New Year week, I thought it might be appropriate to conduct a brief analysis of US-listed China plays.
According to a recent US-China Economic and Security Review Commission report, 265 Chinese companies were listed on the NYSE, Nasdaq and NYSE American exchanges in January 2024 worth US$848bn. 
That's down from 252 companies worth US$1.03tn a year ago, a 17.5% decline. 91% of the total market capitalization of Chinese firms listed on U.S. exchanges use VIEs.


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, BUY, TP US$162) Earnings Review]: Online Ads Growth Will Remain Robust

We expect that Baidu’s ads growth will continue into 2H23, supported by recovery of key advertisers. We slightly increase FY23 EPS estimates and...

Blue Lotus Research Institute

[Blue Lotus Daily - TMT Update]:NTES US/4689 JP/4755 JP/4385 JP/BABA US /BIDU US/700 HK

NetEase's receives positive feedback during first round of testing, PayPay QR-code system crashes for three hours in Japan.China's generative AI...

Blue Lotus Research Institute

[Baidu, Inc. (BIDU US, BUY, TP US$162) TP Change]: Cut TP Due to Weaker Outlook in Ads and Cloud

We expect Baidu's 2Q23’s rev./non-GAAP net income to be (2.3%)/ (1.9%) vs cons, also cut the TP to $162, which implies 16.5X PE in 2023

Blue Lotus Research Institute

Baidu Inc.: AI Cloud Profitability Is A Breath Of Fresh Air – Key Drivers

Baidu managed to surpass the revenue expectations as well as the earnings expectations of Wall Street. Baidu Core's revenue growth reaccelerated...

Baptista Research

Musings On US-Listed China Plays

Investors in Chinese companies may be willing to support activities that are contrary to US national interests, including technology used for...

David Blennerhassett

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

[Baidu (BIDU US, BUY, TP US$162) Earnings Review]: Online Ads Growth Will Remain Robust

We expect that Baidu’s ads growth will continue into 2H23, supported by recovery of key advertisers. We slightly increase FY23 EPS estimates and...

Blue Lotus Research Institute

[Blue Lotus Daily - TMT Update]:NTES US/4689 JP/4755 JP/4385 JP/BABA US /BIDU US/700 HK

​NetEase's receives positive feedback during first round of testing, PayPay QR-code system crashes for three hours in Japan.China's generative AI...

Blue Lotus Research Institute

[Baidu, Inc. (BIDU US, BUY, TP US$162) TP Change]: Cut TP Due to Weaker Outlook in Ads and Cloud

We expect Baidu's 2Q23’s rev./non-GAAP net income to be (2.3%)/ (1.9%) vs cons, also cut the TP to $162, which implies 16.5X PE in 2023

Blue Lotus Research Institute

Baidu Inc.: AI Cloud Profitability Is A Breath Of Fresh Air – Key Drivers

Baidu managed to surpass the revenue expectations as well as the earnings expectations of Wall Street. Baidu Core's revenue growth reaccelerated...

Baptista Research

Musings On US-Listed China Plays

Investors in Chinese companies may be willing to support activities that are contrary to US national interests, including technology used for...

David Blennerhassett

NetEase's receives positive feedback during first round of testing, PayPay QR-code system crashes for three hours in Japan.China's generative AI...