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

[Baidu (BIDU US, SELL, TP US$88) Preview]: Search Traffic’s Decline in Relevance the No.1 Issue

[Baidu (BIDU US, SELL, TP US$85) TP Change]: C1Q25: Accelerated AI Search Transition Releases Risk

[Baidu, Inc. (BIDU US, SELL, TP US$78) Preview]: Baidu’s Problem Is Deep Rooted and Getting Worse

[Baidu, Inc. (BIDU US, SELL, TP US$80) TP Change]: AI Monetization by How Much & At What Cost?

[Baidu, Inc. (BIDU US, SELL, TP US$78) TP Change]: C3Q24 Review: No Respite in Going Ex-Growth

Blue Lotus Non US Internet research, Blue Lotus Research Institute

Ying Pan

Blue Lotus Non US Internet research

Equity Bottom-Up

<ul>
<li>We conducted a drill exercise in which BIDU's search revenue will shrink to 1/3 of its size while its AI cloud</li>
<li>Our key concern is margin compression as search's high margin as a result of browser infrastructure and monopolistic status aren't repeatable in AI;</li>
<li>We raise the TP from US$80.0 to US$92.5 and maintain SELL.</li>
</ul>


We conducted a drill exercise in which BIDU's search revenue will shrink to 1/3 of its size while its AI cloud
Our key concern is margin compression as search's high margin as a result of browser infrastructure and monopolistic status aren't repeatable in AI;
We raise the TP from US$80.0 to US$92.5 and maintain SELL.


[Baidu, Inc. (BIDU US, SELL, TP US$92.5) TP Change]: What Can Change BIDU from SELL to a BUY?