The company's recent situation
Baidu held the Create2024 Baidu AI Developer Conference on April 16. At the conference, management announced the latest developments in the Wenxin Big Model and released new AI tools for developers.
reviews
The scale of API calls is growing rapidly, and the underlying model continues to improve. Currently, the number of Wenxin users has exceeded 200 million (announced at the end of December '23), the average number of daily API calls has exceeded 200 million (the 4Q23 financial report announced a breakthrough of 50 million), and continuous performance and cost optimization: compared to Wenxin 4.0 released in October 23, the efficiency of algorithm training has increased 4.1 times, the average weekly training efficiency has reached 98.8%, inference performance has increased 105 times, and inference costs continue to drop. In addition, the company innovatively introduced Comate, an intelligent assistant for code generation, in its technical architecture. Currently, the adoption rate for code generation has reached 46%; in addition, the company released the Wenxin Big Model 4.0 tool version, which highlights documentation, data analysis, and code interpretation functions to facilitate developers' use.
Optimize the service architecture to improve the development efficiency and experience of AI native applications. Based on continuous refinement of actual applications from internal and external customers, the company released a new intelligent computing operating system “Wan Yuan”:
Kernel layer: The 100 Ge AI heterogeneous computing platform is compatible with large-scale hybrid training of mainstream AI chips at home and abroad. On the basis of reducing dependence on a single chip, it maintains low performance loss (100 calories and kcal hybrid training efficiency reaches 97% and 95%, respectively); in addition, the system's preset large models are quite comprehensive, including the flagship ERNIE 3.5 and 4.0, lightweight ERNIE Speed, Lite and Tiny, and the tripartite model. The company is expected to meet diverse needs in different scenarios.
Shell layer: ModelBuilder (model customization tool) provides model routing services, including model management, scheduling, and secondary development, and provides optimal model combinations under the MoE architecture (that is, mixing large and small models) to further reduce average inference costs. Currently, ModelBuilder has increased the number of models to 77, with 47 data sets and 119 industry-grade prompt templates.
Toolkit layer: supports rapid application development and release. AppBuilder (codeless programming tool) supports third-party APIs and custom components such as flight queries and paper searches, and also has cross-modal capabilities such as Wensheng Maps, and has now been applied in Baidu Library's smart comic functions; AgentBuilder (smart body development tool) currently supports the creation of 30,000 agents, covering more than 30 industries such as education, real estate, home, and business services.
Profit forecasting and valuation
We maintain revenue and non-standard net profit forecasts for 2024 and 2025, maintain outperforming industry ratings, and maintain target prices of HK$151.6 and HK$146.9 for US stocks, corresponding to 2024/2025 non-standard price-earnings ratios of 13 times/11 times US stocks and 13 times/11 times Hong Kong stocks, respectively. Compared with the current US stocks and Hong Kong stocks, there is room for improvement of 57.6% and 56.0% respectively (current US stocks correspond to 8.5 times/7.2 times 2024/2025 non-standard price-earnings ratio, Hong Kong stocks correspond to 8.4 times the 2024/2025 non-standard price-earnings ratio (Multiple/7.1 times 2024/2025 non-standard price-earnings ratio).
risks
New business expansion fell short of expectations, cost reduction and efficiency fell short of expectations, and regulatory risks.