Performance summary: Baidu Group's revenue for the first quarter of 2024 was 31.5 billion yuan, up 1% year on year; non-GAAP net profit was 7 billion yuan, up 22% year on year.
Performance continues to grow, and operational efficiency has improved. On the revenue side, the company's revenue for the first quarter of 2024 was 31.5 billion yuan, an increase of 1% over the previous year. On the profit side, we achieved non-GAAP net profit of 7 billion yuan in the first quarter, an increase of 22% over the previous year. The growth rate of non-GAAP net profit is higher than the revenue growth rate, mainly due to the high-quality growth of the artificial intelligence business and the improvement of operational efficiency.
Ad revenue has been growing steadily, and Baidu app activity has increased. In the first quarter of 2024, Baidu's core online advertising revenue was 17 billion yuan, an increase of 3% over the previous year. Baidu is committed to promoting the transformation of the advertising business user experience from traditional mobile products to generative artificial intelligence experiences, which is expected to increase the advertising conversion rate and attract more advertisers to launch. In March 2024, Baidu App's MAU reached 676 million, an increase of 3% over the previous year. Hosted pages accounted for 50% of Baidu's core online marketing revenue in the first quarter of 2024.
Demand for intelligent clouds is growing, and intelligent driving capabilities are improving. In the first quarter of 2024, Baidu's core non-marketing revenue was 6.8 billion yuan, an increase of 6% over the previous year, driven by the smart cloud business. As of mid-April 2024, Baidu's propeller platform has gathered 13 million developers. In terms of intelligent driving, Baidu's autonomous car service Radish Express had provided more than 6 million ride services as of April 19, providing 826,000 ride services in 2024Q1, an increase of 25% over the previous year; 2024Q1, Baidu released the Apollo ADFM, a major autonomous driving model, and the sixth-generation driverless car, which further improved the safety of autonomous driving.
AI tools are updated and iterated to improve development efficiency. Wenxin's large model has more than 200 million users, with an average daily API call volume of 200 million. 2024Q1 has launched multiple lightweight large language models; launched the three major development tools AgentBuilder, AppBuilder, and ModelBuilder to help developers and enterprises create agents and develop AI native applications and customized models; and launched and improved MaaS platform tools for enterprise customers to accelerate the AI application development process for enterprise customers. Baidu's AI capabilities continue to improve, and the Wenxin Big Model is expected to bring more opportunities to Baidu.
Profit forecast and rating: The company's adjusted EPS for 2024-2026 is expected to be 10.56 yuan, 11.10 yuan, and 11.69 yuan respectively, and non-GAAP net profit will continue to grow over the next three years. As a leading provider of integrated Internet services, the company is actively building a new AI ecosystem. AI capabilities continue to improve, enabling the development of advertising, smart cloud, and intelligent driving businesses. It is expected that the order volume will continue to grow in 2024, maintaining a “buy” rating.
Risk warning: Risks such as AI technology falling short of expectations and ad market recovery falling short of expectations.