Jingu Financial News | Soochow Securities issued research reports, predicting that Baidu Group (09888) will have a revenue of 33.4 billion yuan in Q3 2024, a 3% year-on-year decline; among which Baidu's core revenue will be 26.3 billion yuan, a 1% year-on-year decline. The company is expected to have an adjusted operating profit of 6.6 billion yuan, with Baidu's core adjusted operating profit at 6.3 billion yuan, and an adjusted operating profit margin of 24%. The company is expected to achieve an adjusted net income of 6.2 billion yuan.

The bank estimates that in Q3 of 2024, Baidu's core revenue will be 26.3 billion yuan, a 1% year-on-year decline. Among them, advertising revenue is affected by the macroeconomic environment, expected to decrease by nearly 5% year-on-year. While clients from industries such as education and e-commerce contribute incremental revenue in Q3, advertising demand from industries such as property, merchant alliances, transportation, and medical sectors remains weak. The company's short-term transformation of AI in search products still negatively impacts commercialization of advertising. The bank projects Q3 revenue for the cloud computing business to be 5.4 billion yuan, with a nearly 14% year-on-year growth, where AI continues to increase its share. The company has established a leading position in the domestically generated AI large models and cloud computing field. According to an IDC report, in the first half of 2024, Baidu Intelligent Cloud ranked first in both the "China Model as a Service MaaS Market" and the "China Large AI Model Solutions Market", with market shares of 32.4% and 17% respectively. The bank is bullish on the continued growth of the company's cloud computing business driven by the future development of generated AI. The bank expects stability in non-cloud and non-advertising businesses in Q3.

The bank further points out that the company's business will continue to be influenced in the short term by the macro environment and internal business AI transformations. The bank has lowered the company's 2024-2026 Non-GAAP net profit forecast from 29/30.4/32.6 billion yuan to 27.2/29.5/31.6 billion yuan, corresponding to a Non-GAAP P/E ratio of 8 times in 2024. The company's continuous repurchasing reflects its emphasis on shareholder returns, maintaining a "buy" rating.