Last night, Baidu, Inc. released his second quarterly report. The share price has risen more than 16% (7.7% in intraday trading + 8.5% before trading). Has Baidu, Inc. really made a comeback?

After the release of the second quarterly report, Li Yanhong said in an internal letter that during this period, facing severe external challenges and a weak macro environment, the company has promoted a series of disruptive changes from top to bottom, involving organizational structure, personnel changes, business consolidation, and so on.

In what Li Yanhong called "facing severe external challenges and a weak macro environment", Tencent's second-quarter reported income, which is much larger than Baidu, Inc., increased by 18%, Alphabet Inc-CL C by 19%, and BABA by 42%. On the other hand, Baidu, Inc. 's revenue increased by only 1%, and net profit plummeted by 62%.

The stock price has risen, but Baidu, Inc. 's popularity is still at a freezing point.

Dr. Wu Jun said some time ago: since seven or eight years ago, Baidu, Inc. has basically belonged to a rigid company, and his number two has always left his job and missed the mobile Internet era. Yu Jun, the father of Tieba, said as early as 2016: Baidu, Inc. 's core issue is values, and then the incentive mechanism.

Financial report: still ugly

First, let's review Baidu, Inc. 's first-quarter report. Its total revenue was 24.1 billion yuan, an increase of 15% over the same period last year, and a net loss of 327 million yuan. This is Baidu, Inc. 's first quarterly loss since his listing in 2005, and the "first time" always looks so dazzling. In addition, when the quarterly report was published, the labor pains of Baidu, Inc. 's "No.2 person" Lu Qi's departure were not far away, and Baidu, Inc. was in charge of searching Xiang Hailong, which was doubly negative, so Baidu, Inc. 's stock price plummeted.

In the quarterly report, Robin Li also sent an internal letter: the world we live in is undergoing rapid changes, the new and old kinetic energy is facing the transformation, the uncertainty of the external environment and the intensification of competition have led the entire technology industry to enter a period of shock.

It is true that the technology industry has entered a period of shock. But the tech giants, Tencent, BABA, Amazon.Com Inc, Facebook Inc, Alphabet Inc-CL C and so on, are all going up in shock, while Baidu, Inc. is going down in shock.

According to the financial report of the second quarter, Baidu, Inc. 's total revenue was 26.32 billion yuan, a slight increase of 1% over the same period last year. The net profit attributed to Baidu, Inc. 's shareholders was 2.412 billion yuan, down 62% from a year earlier, compared with 6.402 billion yuan in the same period last year.

More crucially, the revenue of search, Baidu, Inc. 's basic business, as mentioned by Li Yanhong, was 19.54 billion yuan, down 2% from a year earlier, while net profit plummeted 54%:

And Baidu, Inc. has been emphasizing the "all in" artificial intelligence, such as Apollo autopilot, more thunder than rain, there is still a very long way to go to commercialization. The contribution to the financial report is only two words, burning money. In addition, the main business is going downhill, where does the big money that artificial intelligence needs to spend come from? There is still a question mark as to whether the sustainable and healthy development can be maintained.

Since the results are still ugly, why did Baidu, Inc. 's share price soar? It is more of an oversell rebound: Baidu, Inc. 's share price has fallen nearly 40 per cent since it reported a loss in the first quarter.

In addition, in the first quarterly report, Baidu, Inc. expects second-quarter revenue to fall 3% to 2% growth, currently only 1% growth, can only be said to be barely in line with expectations.

In terms of guidance for the third quarter, Baidu, Inc. expects total revenue in the third quarter of fiscal 2019 to be 26.9 billion yuan to 28.5 billion yuan, down 5 per cent from a year earlier to an increase of 1 per cent. The situation is still not optimistic.

So,The persistence of the stock price rebound may be called into question。

22 Baidu, Inc. is not worth 1 Alphabet Inc-CL C.

Baidu, Inc. and Alphabet Inc-CL C are both search companies, the largest search company in China and the largest search company in the world.

On July 26th, after Alphabet Inc-CL C released its second-quarter results, its share price soared by more than 10%, and its market value rose by $82 billion a day, surpassing two Baidu, Inc. (Baidu, Inc. currently has a market capitalization of only $36 billion).

According to Alphabet Inc-CL C's second quarterly report, total revenue was $38.944 billion (275 billion yuan, or 10.6 times that of Baidu, Inc. in the same period), up 19% from a year earlier. Net profit was $9.947 billion (35 times that of Baidu, Inc. in the same period), a year-on-year increase of 211%.

In terms of market capitalization, Alphabet Inc-CL C's market capitalization is about 832.6 billion US dollars, which is currently the fourth largest in the world, while Baidu, Inc. 's market capitalization is 36.4 billion US dollars. In other words, in terms of market capitalization, 22 Baidu, Inc. is not worth one Alphabet Inc-CL C. Alphabet Inc-CL C's market trend:

Going back to 15 years ago, in 2004, Alphabet Inc-CL C was listed, and soon after, in 2005, Baidu, Inc. was also listed. It can be said that it was basically at the same starting line. From the beginning of the market value, Alphabet Inc-CL C's market value increased by 36 times. Baidu, Inc. 's market value increased only eight times. Coincidentally, since its listing in 2004, Tencent's market capitalization has increased by as much as 700 times. Baidu, Inc. has been left far behind, perhaps as Dr. Wu Jun said, this company is basically not the object that we usually pay attention to.

Valuation: not as good as Foxconn in manufacturing

For Internet companies, everything is about growth.

In the second quarter, Baidu, Inc. 's revenue grew by only 1 per cent year-on-year, while net profit fell 62 per cent. At present, according to Futu Securities, its static price-to-earnings ratio is only 9.2 times, far lower than 27 times Alphabet Inc-CL C, 28 times BABA and 35 times Tencent.

It is even much lower than A-share listed Foxconn, whose first-half revenue rose 7.24% to 170.5 billion yuan and net profit rose 0.62% to 5.47 billion yuan. At present, the static price-to-earnings ratio is 17.5 times, about twice that of Baidu, Inc..

There is no comparison, there is no harm, we can see that such a low valuation shows that the market expectations of Baidu, Inc. 's prospects are not optimistic.

Baidu, Inc., the public is no longer looking for him?

800 years ago, Xin Qiji, a poet of the Southern Song Dynasty, wrote such a noun: the crowd looked for him thousands of degrees, and suddenly looked back, but the man was in the dim lights.

Twenty years ago, Robin Li founded a poetic search company named Baidu, Inc. in Zhongguancun.

However, events such as Wei Zexi, the departure of senior executives and the Baijia scandal have emerged one after another, leading to "Hongyan getting water". For many people, there is no such poetic flavor.

Finally, I hope Baidu, Inc. will once again become a simple, dream-driven company, as it was when it was born 20 years ago.