reports
- Jin Yoon
- Julia Pan Mengyao
- Ming San Soong
China Internet: Rewarding shareholders in 2023; emerging strategic gro...
Given the stabilising revenue growth and abundant cash on hand, mega-cap internet companies have been focusing on offering generous shareholder returns. For 2024, we expect consumption behaviour to switch to service and experience, which will continue to benefit OTA players. We believe other China internet names will outperform with overseas expansion and SFV players will continue to gain market shares with potential for take rate increases. Maintain MARKET WEIGHT.
JD JD.COM INC. SPONSORED ADR CLASS A
K3SD BAIDU INC SPONSORED ADR CLASS A
A117ME ALIBABA GROUP HOLDING LTD. SPONSORED ADR
3K1 KINGSOFT CORP. LTD.
00700 TENCENT HOLDINGS LTD.
PDD PINDUODUO INC. SPONSORED ADR CLASS A
03690 MEITUAN CLASS B
00780 TONGCHENG-ELONG HOLDINGS LIMITED
TCOM TRIP.COM GROUP LTD. SPONSORED ADR
BEKE KE HOLDINGS INC. SPONSORED ADR CLASS A
09988 ALIBABA GROUP HOLDING LTD.
09999 NETEASE INC
09618 JD.COM INC. CLASS A
01024 KUAISHOU TECHNOLOGY CLASS B
09888 PINDUODUO PDD US
02423 BAIDU INC
09961 KE HOLDINGS INC.
CTRIP.COM INTERNATIONAL
- Jin Yoon
BIDU 4Q23 Results: Visibility Remains Limited
What’s new: Baidu’s reported 4Q23 top-line results were largely in-line with consensus and our expectations. Near-term visibility remains limited amid uncertainties in macro. Margins could remain stable as investments in AI-related initiatives could be offset by continued business optimization. We maintain our PT at USD200. Analysts: Jin Yoon
- Julia Pan Mengyao
- Ming San Soong
Baidu Inc (9888 HK): 4Q23: Solid earnings growth; all eyes on AI-power...
Baidu’s 4Q23 results were within expectations. Revenue grew 6% yoy to Rmb35b, in line with consensus estimates. Gross margin expanded 1.4ppt yoy to 50.2%, within consensus expectations. Non-GAAP operating profit was Rmb7.1b, up 9% yoy, while non-GAAP operating profit margin came in at 20%. Non-GAAP net profit improved by 44% yoy to Rmb7.8b on one-off gains, exceeding consensus estimates by 22%. Maintain BUY with a lower target price of HK$128.00 (US$142.00).
- Ceilica Su Rui
- Damon Shen
- Greater China Research Team
- Jieqi Liu
- Jo Yee Ng
- Julia Pan Mengyao
- Ming San Soong
- Shirley Wang Xueyi
- Stella Guo Yuting
- Tham Mun Hon
- Ziv Ang Sze Champ
Greater China Daily: Thursday, February 29, 2024
KEY HIGHLIGHTS Economics 2024/25 Budget Tough Balancing Act. Sector Property Government removes all cooling measures on Hong Kong property; upgrade sector to MARKET WEIGHT. Results Baidu Inc (9888 HK/BUY/HK$106.60/Target: HK$128.00) 4Q23: Solid earnings growth; all eyes on AI-powered ads and Ernie Bot in 2024. Galaxy Entertainment Group (27 HK/BUY/HK$42.05/Target: HK$56.00) 4Q23: Market share shrank within expectations; expanding share in 2024. Sun Hung Kai Properties (16 HK/BUY/HK$78....
- Tian Hou
BIDU: Investments In AI and AI Cloud To Fuel Future Growth; Positive O...
We are positive about BIDU’s AI performance in 4Q23, and its advertising business is in line with China's economy. China’s economy did not show better growth in 2023 after the government ceased all Covid restrictions. While there were some improvements in the economy in 4Q23, the recovery was still below expectations. As a result, advertising growth may not grow as well as expected in 4Q23. However, BIDU continues to invest in AI with Ernie 4.0, which was launched in October 2023. We are positiv...
- Julia Pan Mengyao
- Ming San Soong
Baidu Inc (9888 HK): 4Q23 results preview: AIGC monetisation to foster...
4Q23 results will be released in mid-Mar 24. We forecast 4Q23 revenue to grow 7% yoy, mainly anchored by incremental contributions from ad and AI Cloud revenue growth, empowered by AI application. Management expects AI-related ad revenue in 4Q23 to hit hundreds of millions in renminbi, with a low to mid single-digit revenue contribution to AI Cloud. Baidu also expects quarterly revenue from generative AI to surpass Rmb1b in 2024. Maintain BUY with a lower target price of HK$135.00 (US$138.00).
- Greater China Research Team
- Julia Pan Mengyao
- Kenny Yong Hui Lim
- Ming San Soong
- Tham Mun Hon
Greater China Daily: Friday, February 1, 2024
KEY HIGHLIGHTS Economics PMI PMI bounces back; not out of the woods yet. Update Baidu Inc (9888 HK/BUY/HK$103.40/Target: HK$135.00) 4Q23 results preview: AIGC monetisation to foster ads and AI Cloud. PICC Property and Casualty (2328 HK/HOLD/HK$9.72/Target: HK$10.00) Sunshine after the rain. TRADERS’ CORNER Cathay Pacific Airways Limited (293 HK): Trading buy range: HK$7.50-7.90 China Resources Power Holdings (836 HK): Trading buy range: HK$15.00-15.40
- Jin Yoon
Baidu Responds to Recent Media Reports on Ernie Bot
Baidu Responds to Recent Media Reports on Ernie Bot BEIJING, Jan. 15, 2024 (GLOBE NEWSWIRE) -- Baidu, Inc. (NASDAQ: BIDU and HKEX: 9888 (HKD Counter) and 89888 (RMB Counter)) ("Baidu" or the "Company"), a leading AI company with strong Internet foundation, has become aware of media reports regarding an academic paper that mentioned several large language models ("LLM") such as GPT3.5, GPT-3.5-turbo, GPT4, HTML-T5, and Baidu's ERNIE Bot and would like to offer the following clarifications. ERNIE Bot is available to and used by the general public. The academic paper, published by scholars ...
- Jin Yoon
BIDU 3Q23 Results: Margins to Remain Stable
What’s new: Baidu’s reported 3Q23 results were above consensus and our expectations. Ads and cloud rev growth in 4Q could fare better than 3Q partly due to easier comps and incremental contribution from generative AI. Margins could remain stable as the incremental contribution from generative AI could partly offset investments related to procurement of chips. We maintain our PT at USD200.
- Julia Pan Mengyao
- Ming San Soong
Baidu Inc (9888 HK): 3Q23: Earnings beat; expecting monetisation of ER...
Baidu’s 3Q23 earnings beat expectations. Revenue grew 6% yoy to Rmb34b, in line with the street’s estimate. Gross margin expanded 2.7ppt yoy to 52.7%, above consensus expectation. Non-GAAP operating profit was Rmb7.6b, up 9% yoy, while non-GAAP operating profit margin came in at 22%, beating our estimate. Despite investments in AI, non-GAAP net profit improved 23% yoy to Rmb7.3b, exceeding consensus estimate by 16%. Maintain BUY with a lower target price of HK$166.00 (US$171.00).
- Jo Yee Ng
- Johnny Yum Chung Man
- Julia Pan Mengyao
- Ming San Soong
- Shirley Wang Xueyi
- Stella Guo Yuting
- Terence Chiu
Greater China Daily: Wednesday, November 22, 2023
KEY HIGHLIGHTS Sector Industrial Automation Demand stabilises with marginal recovery in 4Q23, demand driver to shift in 2024. Downgrade to MARKET WEIGHT. Results Baidu Inc (9888 HK/BUY/HK$107.40/Target: HK$166.00) 3Q23: Earnings beat; expecting monetisation of ERNIE 4.0. Kuaishou Technology (1024 HK/BUY/HK$58.50/Target: HK$97.00) 3Q23: Solid earnings beat; key beneficiary of adtech tailwinds. Miniso (MNSO US/NOT RATED/US$27.66) 1QFY24: Earnings beat; strong growth from overseas and...
- Julia Pan Mengyao
- Ming San Soong
China Internet: 3Q23 results preview: Solid e-commerce ad growth to dr...
We expect e-commerce ads and overseas e-commerce expansion to be the main driving forces spurring stagnant growth in 3Q23 and beyond. In addition, we are optimistic about the better-the-expected growth in game gross profit and on-track OTA data on the back of strong seasonality. We are also looking out for meaningful progress in AIGC development in 3Q23 and better visibility in 4Q23. Maintain MARKET WEIGHT on the internet sector.
JD JD.COM INC. SPONSORED ADR CLASS A
K3SD BAIDU INC SPONSORED ADR CLASS A
A117ME ALIBABA GROUP HOLDING LTD. SPONSORED ADR
3690 MEITUAN DIANPING 3690 HK
700 HK TENCENT 700 HK
TCOM US TRIP.COM TCOM US
9988 ALIBABA (9988 HK)
9618 JD.COM INC
1024 KUAISHOU TECHNOLOGY
9888 BAIDU INC
PDD PINDUODUO PDD US
9999 HK NETEASE INC
780 TONGCHENG TRAVEL HOLDINGS LTD
9961 TRIP.COM GROUP LTD
- Jin Yoon
- Julia Pan Mengyao
- Ming San Soong
Baidu Inc (9888 HK): ERNIE Bot 4.0 unveiled at Baidu World Conference ...
On 17 October, the Baidu World Conference 2023 themed "Creating the Future: PROMPT THE WORLD" was held in Beijing. CEO Robin Li demonstrated four core capabilities of the upgraded ERNIE 4.0 − understanding, generation, logic, and memory. After being made available to the public for 1.5 months, ERNIE Bot has accumulated 45m users and 54,000 developers. Maintain BUY with a lower target price of HK$183.00 (US$189.00).
- Bella Lu Yifei
- Jo Yee Ng
- Julia Pan Mengyao
- Ken Lee
- Ming San Soong
- Roy Chen Chengzhi
- Shirley Wang Xueyi
- Stella Guo Yuting
- Terence Chiu
Greater China Daily: Wednesday, October 18, 2023
KEY HIGHLIGHTS Sector Aviation Airlines Sep 23 operating data: pax load performance below expectations; overcapacity issue remains. Maintain UNDERWEIGHT. Macau Gaming Marketing feedback: Be selective; eyes on cost management amid intensified competition. Maintain MARKET WEIGHT. Initiate Coverage Ningbo Tuopu Group Co (601689 CH/BUY/Rmb66.49/Target: Rmb105.00) Leading intelligent lightweight chassis solution provider in China. Initiate coverage with BUY. Target price: Rmb105.00. Results Fuyao...
- Greater China Research Team
Greater China Strategy Alpha Picks: October conviction calls.
MSCI China and HSI fell 1.2% and 1.4% respectively in September as investors’ sentiment was dampened by the weaker macro data and renewed property sector woes. Moreover, higher US bond yields and US dollar strength added to the downside pressure. For October, we expect further downside pressure, so we add SELLs on Henlius and Xpeng to the list, on top of BUYs on Anta, Lenovo, PICC P&C and SHKP.
K3SD BAIDU INC SPONSORED ADR CLASS A
00016 SUN HUNG KAI PROPERTIES LIMITED
00992 LENOVO GROUP LIMITED
01109 CHINA RESOURCES LAND LIMITED
02328 PICC PROPERTY & CASUALTY CO. LTD. CLASS H
600519 KWEICHOW MOUTAI CO. LTD. CLASS A
1211 BYD COMPANY LIMITED CLASS H
TCOM TRIP.COM GROUP LTD. SPONSORED ADR
1496219D BEIJING KUAISHOU TECHNOLOGY
709 GIORDANO INTERNATIONAL LTD
TCOM US TRIP.COM TCOM US
300750 CONTEMPORARY AMPEREX TECHNOLOGY CO. LTD. CLASS A
2696 SHANGHAI HENLIUS BIOTECH INC
1024 KUAISHOU TECHNOLOGY
XPEV XPENG INC. ADR SPONSORED CLASS A
9868 XPENG INC
9888 BAIDU INC
9961 TRIP.COM GROUP LTD
- Julia Pan Mengyao
- Ming San Soong
China Internet: Strong growth in online ads and OTA likely to continue...
China’s internet sector delivered solid 2Q23 results with an earnings beat but this was followed by lukewarm 3Q23 guidance from most companies navigating macro uncertainty. In view of the intense competition and saturated growth, internet companies are ramping up AIGC investment and cross border expansion against a favourable regulatory backdrop. Maintain MARKET WEIGHT on the internet sector due to heavy investment in new initiatives leading to margin erosion.
JD JD.COM INC. SPONSORED ADR CLASS A
K3SD BAIDU INC SPONSORED ADR CLASS A
A117ME ALIBABA GROUP HOLDING LTD. SPONSORED ADR
00700 TENCENT HOLDINGS LTD.
1496219D BEIJING KUAISHOU TECHNOLOGY
3690 MEITUAN DIANPING 3690 HK
700 HK TENCENT 700 HK
TCOM US TRIP.COM TCOM US
9988 ALIBABA (9988 HK)
BEKE KE HOLDINGS INC
9618 JD.COM INC
1024 KUAISHOU TECHNOLOGY
9888 BAIDU INC
PDD PINDUODUO PDD US
9999 HK NETEASE INC
780 TONGCHENG TRAVEL HOLDINGS LTD
9961 TRIP.COM GROUP LTD
- Julia Pan Mengyao
- Ming San Soong
China Internet: Upgraded LLMs launched amid positive regulatory develo...
China saw the emergence of 130 LLMs as of end-Aug 23, surpassing the US and positioning it at the forefront of LLM development. AI-related guidelines incorporate enhanced government support and feature less stringent content accuracy requirements as the sector is being leveraged to stimulate economic growth, leading to a robust post-pandemic recovery. We remain optimistic in view of the initial regulatory approvals granted to 11 LLM products. Maintain MARKET WEIGHT.
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