Next week, several internet companies will release their results for the first quarter of 2024. For example, the one everyone is familiar with$TENCENT (00700.HK)$,$BABA-SW (09988.HK)$,$BIDU-SW (09888.HK)$etc.
Take Baidu as an example. The company will announce its results for the first quarter of this year on May 16. According to CITIC Lyon's forecast, Baidu's core revenue for the first quarter increased 3% year on year to 23.7 billion yuan, and adjusted profit before interest and tax fell 3% year on year to 5.2 billion yuan, mainly due to weak macroeconomic conditions. Demand for advertising remains strong in healthcare, travel, and e-commerce, but demand for advertising in real estate, automotive, and franchise sectors is weak.
However, the brokerage firm believes that the macroeconomic disadvantages faced by Baidu may be offset by the gradual increase in revenue from generative artificial intelligence. For example, Tesla and Baidu have recently collaborated on maps. Currently, several of the company's “Advanced Assisted Driving Maps” have been approved by the Ministry of Natural Resources.
Meanwhile, the market also recently announced that Baidu will provide AI features for the iPhone 16, Mac systems, and iOS 18 released by Apple this year. In response, CITIC Lyon pointed out that Baidu has an opportunity to become Apple's potential partner in the field of artificial intelligence.
Furthermore, CITIC Lyon believes that Baidu's current valuation is still low, maintaining its US stock target price of 158 US dollars, with a “buy” rating.
Some agencies say most internet companies performed in the first quarter in line with expectations
BOC International pointed out yesterday that in the first quarter of this year, the performance of most Internet companies met market expectations, thanks to the broad market space of the industry, the steady performance of the company's performance, and the ability to mitigate potential risks. Furthermore, the company boosted investors' confidence through buybacks and dividend payments.
In the field of OTA platforms, Ctrip Group and Tongcheng Travel performed strongly due to the travel boom during the Qingming and May Day holidays. Market concerns about the sustainability of travel consumption are easing, and previous predictions about structural changes in travel demand supporting industry growth have been verified by the market. In the context of a clear competitive pattern and misplaced competition between platforms, it is expected that by 2024, there will be room for further increase in OTA platform profits.
Although competition is fierce in the field of local lifestyle services,$MEITUAN-W (03690.HK)$Douyin's market position is already relatively stable. The steady performance of Meituan, in particular, was strengthened after the valuation bottomed out (the lowest point of the stock price corresponds to 12 times the price-earnings ratio in 2024), and it is expected that its stock price will have great potential for a rebound.
BOC International also emphasized that Internet companies' second-quarter performance guidelines will be a key factor affecting stock price trends. For example, the market's growth expectations for OTA platforms after full recovery of outbound travel, as well as revenue expectations for new games to be launched by Tencent and NetEase, are important indicators that investors need to pay close attention to.
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