reports
- Jin Yoon
BIDU 3Q24 Results: Monetization of Gen-AI Search Could Take Time to Ma...
What’s new: Baidu’s reported 3Q24 top-line results that were largely in line with consensus and our expectations. Baidu Core ads could remain challenging in 4Q partly due to macro and limited monetization related to gen-AI search. AI Cloud rev growth could accelerate in 4Q partly driven by gen-AI related revs. We lower our PT from USD130 to USD110 amid lowered outlook. Our updated PT of USD110 implies 10.6x FY25E P/E. We maintain our BUY rating. Analysts: Jin Yoon
- Julia Pan Mengyao
- Ming San Soong
Baidu Inc (9888 HK/): 3Q24: Earnings miss on AIGC investment; expect s...
Baidu’s 3Q24 results came in below expectations. Revenue grew 3% yoy to Rmb33.6b, in line with consensus estimate. Gross margin inched down 2ppt yoy to 51.1%, within consensus expectation. Non-GAAP operating profit was Rmb7b, down 8% yoy, while non-GAAP operating profit margin came in at 21%. Non-GAAP net profit plummeted 19% yoy to Rmb5.9b, missing consensus estimate by 6%. Maintain HOLD with an unchanged target price of HK$90.00 (US$100.00).
- Bella Lu Yifei
- Colin Lee
- Gigi Cheuk
- Greater China Research Team
- Johnny Yum Chung Man
- Julia Pan Mengyao
- Kate Luang
- Ken Lee
- Ming San Soong
- Shirley Wang Xueyi
- Stella Guo Yuting
Greater China Daily: Friday, November 22, 2024
KEY HIGHLIGHTS Sector Automobile China’s PV insurance registrations grew 29% yoy, 15% mom and 14% wow during 11-17 Nov 24. PEV market share dipped 2.6ppt wow to 51.5%. BYD's price cuts aim to boost sales but risk pressuring 4Q24 margins. The NDRC indicated support for ICE-cars, the first time in recent years. The Guangzhou Auto Show highlighted record-breaking figures and new trends in technology, models and pricing. Maintain MARKET WEIGHT. Top BUYs: Geely, Fuyao, and Desay SV. IT Hardware Co...
- Julia Pan Mengyao
- Ming San Soong
China Internet: Encouraging monetisation visibility from adtech and LL...
Lately, internet companies convened their respective AI conferences, unveiling a wide range of upgraded AI products that showcase their AI infrastructure development and AI monetisation potential. We opine that the prevailing trend in adtech upgrades focuses on enhancing marketing efficiency and driving GMV growth, resulting in monetisation improvement. We remain optimistic in view of the favourable regulatory environment and industry development. Maintain MARKET WEIGHT.
- Julia Pan Mengyao
- Ming San Soong
China Internet: Key takeaways from marketing trip.
The key concerns of investors include the sustainability of the recent rally and potential fundamental changes upon policy rollout. We think a valuation repair is underway with the upcoming 11.11 campaign and 3Q/4Q24 results release as a critical juncture. Investors are also becoming increasingly optimistic on mega-cap names such as Tencent, Meituan, Alibaba and JD in view of a favourable regulatory backdrop and stabilised competitive environment. 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.
002230 IFLYTEK CO. LTD. CLASS A
00700 TENCENT HOLDINGS LTD.
PDD PINDUODUO INC. SPONSORED ADR CLASS A
03690 MEITUAN CLASS B
00780 TONGCHENG-ELONG HOLDINGS LIMITED
2013 WEIMOB INC
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 BAIDU INC
02423 KE HOLDINGS INC.
09961 CTRIP.COM INTERNATIONAL
- Julia Pan Mengyao
- Ming San Soong
China Internet: Government policy rollout to boost consumption and dri...
In view of a stronger-than-expected government policy rollout, we reckon that the improved consumption sentiment will benefit e-commerce, local life services and OTA companies. In 2H24, we expect the undemanding valuations of internet companies to be repaired by shareholder returns, cross-border expansion and easing competition. Meanwhile, we believe monetisation momentum will be fuelled by AIGC development and adtech upgrades. 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.
002230 IFLYTEK CO. LTD. CLASS A
00700 TENCENT HOLDINGS LTD.
PDD PINDUODUO INC. SPONSORED ADR CLASS A
03690 MEITUAN CLASS B
00780 TONGCHENG-ELONG HOLDINGS LIMITED
2013 WEIMOB INC
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
- Julia Pan Mengyao
- Ming San Soong
Baidu Inc (9888 HK): Key highlights from Baidu Cloud Intelligence Conf...
Baidu Cloud Intelligence Conference 2024 was held on 25-26 September in Beijing. Baidu upgraded its two key AI infrastructures, Qianfan Large Model Platform 3.0 and AI Computing Platform 4.0, focusing on computing power, LLM, and AI applications. Meanwhile, the company also enhanced three major AI-native applications including intelligent customer service Keyue, digital human Xiling and code assistant Baidu Comate. Maintain HOLD with a slightly higher target price of HK$90.00 (US$100.00).
- Carol Dou Xiao Qin
- Damon Shen
- Greater China Research Team
- Jieqi Liu
- Julia Pan Mengyao
- Ming San Soong
- Sunny Chen
Greater China Daily: Friday, September 27, 2024
KEY HIGHLIGHTS Results New World Development (17 HK/SELL/HK$8.19/Target: HK$7.02) NWD reported HK$11.8b in attributable loss from continuing business for FY24. Dividend has been halted to accelerate deleveraging. Although its IP portfolio has remained resilient, sluggish Hong Kong property sales and high net gearing remain as key concerns. The new management has pledged to improve profitability. We think profitability recovery and dividend normalisation will take some time. Maintain SELL wit...
- Jin Yoon
BIDU 2Q24 Results: Ad Outlook Remains Challenging in 2H
What’s new: Baidu’s reported 2Q24 top-line results that were largely in-line with consensus and our expectations. Baidu Core ads could remain challenging in the 2H partly due to macro, competition, and limited monetization related to generative-AI search. AI Cloud rev growth could accelerate in 3Q partly driven by generative-AI related revs. We lower our PT from USD170 to USD130 due to limited visibility in ad recovery. Our updated PT of USD130 implies 12.5x FY25E P/E. We maintain our BUY rating...
- Julia Pan Mengyao
- Ming San Soong
Baidu Inc (9888 HK): 2Q24: Earnings beat; modest online ad growth; sol...
Baidu’s 2Q24 results were within expectations. Revenue remained flattish yoy at Rmb33.9b, in line with consensus estimate. Gross margin inched down 1ppt yoy to 51.7%, within consensus expectation. Non-GAAP operating profit was Rmb7.5b, up 2% yoy, while non-GAAP operating profit margin came in at 22%. Non-GAAP net profit declined 8% yoy to Rmb7.4b, exceeding consensus estimate by 11%. Maintain BUY with a lower target price of HK$110.00 (US$123.00).
- Bella Lu Yifei
- Carol Dou Xiao Qin
- Damon Shen
- Greater China Research Team
- Jieqi Liu
- Johnny Yum Chung Man
- Julia Pan Mengyao
- Ken Lee
- Kenny Yong Hui Lim
- Ming San Soong
- Sunny Chen
Greater China Daily: Friday, August 23, 2024
KEY HIGHLIGHTS Results AAC Technologies (2018 HK/BUY/HK$31.25/Target: HK$38.10) AAC’s 1H24 earnings grew 257% yoy to Rmb537m, significantly exceeding our and consensus estimates. The strong growth was mainly driven by an all-around beat in gross margins across all business segments amid better end-demand, specs upgrades and a competitive landscape. Going forward, the product mix improvements, AI smartphone upgrades, and automotive business will continue to drive earnings recovery from 2H24-2...
K3SD BAIDU INC SPONSORED ADR CLASS A
01299 AIA GROUP LIMITED
A2XN AAC TECHNOLOGIES HOLDINGS INC.
M3I MINTH GROUP LIMITED
06098 COUNTRY GARDEN SERVICES HOLDINGS CO. LTD.
09999 NETEASE INC
2269 WUXI BIOLOGICS (CAYMAN) INC.
09888 BAIDU INC
600699 NINGBO JOYSON ELECTRONIC CORP
JOYSON ELECTRONICS CORP
- Tian Hou
- Jin Yoon
BIDU 2Q24 Preview: Nudging Down Estimates on Slower Ad Recovery
What’s New: We nudge down our 2Q and 2H Baidu Core top-line estimates as ad recovery could be slower than anticipated partly due to macro and reconstruction of gen-AI search. Margins could remain stable as Baidu could continue to be prudent in its overall investments. Analysts: Jin Yoon
- Julia Pan Mengyao
- Ming San Soong
Baidu Inc (9888 HK): Encouraging visibility in the deployment and mone...
We opine that Baidu’s autonomous driving business is poised for profitability upon viable commercialisation. Wuhan has become the focal point of Baidu Apollo’s driverless car operations. 1,000 Apollo Go driverless taxis have been deployed here, with peak daily orders per vehicle exceeding 20. We believe Baidu’s outlook will be boosted by the integration of LLM which will foster monetisation of online ads and autonomous driving. Maintain BUY with a target price of HK$126.00 (US$140.00).
- Bella Lu Yifei
- Carol Dou Xiao Qin
- Greater China Research Team
- Julia Pan Mengyao
- Ken Lee
- Ming San Soong
- Sunny Chen
- Tham Mun Hon
Greater China Daily: Thursday, July 11, 2024
KEY HIGHLIGHTS Economics Inflation Consumer price inflation cooled to 0.2% yoy in Jun 24, missing Bloomberg consensus of 0.4% yoy. This was mainly weighed by food prices (-2.1% yoy), as core inflation stayed at 0.6% yoy. PPI came in at -0.8% yoy as expected, up 0.6ppt, and is the highest reading since Jan 23. This narrowing of the decline in PPI is consistent with the uptrend in global commodity prices. We do not see a meaningful increase in deflationary risk, with the bigger concern being man...
- Jin Yoon
BIDU 1Q24 Results: Baidu Core Ads Could Remain Challenging in the Near...
What’s new: Baidu’s reported 1Q24 top-line results that were largely in-line with consensus and our expectations. Baidu Core ads could remain challenging in the near-term, while AI Cloud rev growth could accelerate in 2Q and 3Q partly driven by generative-AI related revs. We lower our PT from USD200 to USD170 (16.0x FY24E P/E) partly due to limited visibility in ad recovery. We maintain our BUY rating. Analysts: Jin Yoon
- Julia Pan Mengyao
- Ming San Soong
Baidu Inc (9888 HK): 1Q24: Earnings beat; subdued ad revenue growth st...
Baidu’s 1Q24 results were within expectations. Revenue grew 1% yoy to Rmb31.5b, in line with consensus estimates. Gross margin remained flattish yoy at 51.5%, within consensus expectations. Non-GAAP operating profit was Rmb6.7b, up 4% yoy, while non-GAAP operating profit margin came in at 21%. Non-GAAP net profit improved by 22% yoy to Rmb7b on one-off gains, exceeding consensus estimates by 26%. Maintain BUY with a lower target price of HK$126.00 (US$140.00).
- Bella Lu Yifei
- Carol Dou Xiao Qin
- Greater China Research Team
- Julia Pan Mengyao
- Ken Lee
- Ming San Soong
- Sunny Chen
Greater China Daily: Friday, May 17, 2024
KEY HIGHLIGHTS Sector Automobile China’s PV retail sales volume grew 5% yoy and 18% wow in the week ending 12 May 24 on delayed booking of sales registered during the Labour Day holiday. PEVs’ market share rebounded to 45% during the week, due to government subsidies and price cuts. The US raised tariffs on Chinese EVs and lithium-ion EV batteries, but we see limited impact. Maintain MARKET WEIGHT. Top BUYs: Geely, CATL, Tuopu and Yadea. Top SELLs: Li Auto and XPeng. Downgrade GWM from BUY t...
- Tian Hou
BIDU: Positive On Long-Term Outlook; Monetization In AI To Drive Futur...
BIDU will report 1Q24 results on May 16th before the markets open with an 8am ET conference call. We are neutral on BIDU’s performance in 1Q24, and its advertising business is in line with China's economy. We believe China’s economy has reached a bottom and should begin its slow recovery soon. While advertising may not see meaningful improvements right away, we do expect gradual improvement as the year progresses. We are positive about BIDU’s long-term outlook, as the company continues to invest...
- Jin Yoon
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