BIDU/9888.HK: Valuing Baidu By Segment Beyond Search
Over the last several years, BIDU has invested heavily in new areas to capture the new frontier of technological development and to diversify its business beyond search. Its business has changed from search and marketing to three buckets: 1) mobile ecosystem, which is marketing and ad related; 2) AI Cloud; and 3) Intelligent Driving & OGI (Figure 1); the latter two are non-marketing and non-ad related. While some of these businesses are still in the relatively early stage of monetization including its AI business, they are in the phase of rapid growth. We believe BIDU’s AI Cloud is different than the basic cloud and its autonomous driving initiatives are more advanced than what’s available in the market. Currently, BIDU’s valuation does not include meaningful valuations from its AI Cloud and autonomous driving initiatives.
T.H. Capital is an independent research and investment advisory firm specializing in China. We offers real-time, on-the-ground, bottom-up research across a wide spectrum from macro and industry analysis to company specific projects; from China ADRs to international names that have meaningful exposure to China market. We deliver relevant, comprehensive and data driven research adding immense value to clients.
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