Baidu-SW (09888.HK) announced yesterday (8th) that it will rotate its management team. Rong Luo will serve as the group's Executive Vice President and head of Baidu's Mobile Ecosystem Business Group (MEG), no longer holding the position of Chief Financial Officer; Junjie He will serve as the acting Chief Financial Officer, no longer serving as Senior Vice President of the group and head of Baidu's Mobile Ecosystem Business Group.

Citi's report pointed out that while it seems to be a common practice for Baidu to rotate its management team, it is surprising that the rotation involves the Chief Financial Officer and the management of Baidu's Mobile Ecosystem Business Group (MEG), as these positions require relevant experience and skills in budgeting and investor communication. However, the bank believes that this decision may be because Baidu's CEO hopes to strengthen administrative leadership development and talent nurturing to support the group's long-term growth goals. As for Rong Luo and Junjie He's rich experience in administrative management, it will help them transform into more effective strategic execution and management collaboration in their new positions, enhancing operational decision-making efficiency.

In addition, by merging the Health Business Group (HCG) into MEG, Baidu aims to enhance synergies between different business units, and better coordinate internal corporate resources, according to the bank.

The bank supports Baidu's management rotation, believing that this move can optimize the corporate structure and improve efficiency, maintaining a 'buy' rating for Baidu (BIDU.US) stock with a target price of $144.