将提升AI 能力作为长期战略重点。（1）应用和用户侧：文心一言日均调用量达15亿，用户规模达4.3 亿；百度文库AI 用户累计超2.3 亿，AI 功能累计使用28 亿次。（2）平台建设：文心智能体平台入驻企业15 万家，入驻开发者80 万人；飞桨文心生态开发者数量达1808 万，服务企业43 万家，创建模型101 万个；千帆大模型帮助用户构建3.3 万个大模型，开发77 万个企业应用；超60%的央企和大规模民营企业选择百度智能云进行AI 创新。（3）AI 大模型：文心大模型推理效率提升48%，生成1.7 万亿Token；推出Speed Pro 和Lite Pro 模型，提升低延迟、高吞吐量与准确性。[Incident] The company released the 24Q3 financial report. Baidu's total revenue was 33.56 billion yuan (yoy -2.6%), which was basically in line with Bloomberg's expectations; adjusted net profit was 5.89 billion yuan (yoy -19%), and the non-gaap margin was 17.54%.
Core advertising continues to be under pressure, and smart clouds help non-marketing businesses grow beyond expectations. In 24Q3, Baidu achieved revenue of 33.56 billion (yoy -2.6%), Baidu's core revenue of 26.5 billion yuan (yoy -0.2%, slightly better than Bloomberg's YOY -0.8% forecast), of which advertising marketing achieved revenue of 18.8 billion yuan (yoy -4.6%; Bloomberg's agreed forecast was yoy -4.4%), and non-marketing revenue of 7.7 billion yuan (yoy +12.4%, better than Bloomberg's YOY -19.6% forecast), mainly driven by the intelligent cloud business.
Cost-side control is stable, and profit margins remain stable. 24Q3 Baidu's gross margin was 51.1% (yoy-1.6pct), and Baidu's core gross margin was 58.8% (yoy-1.3pct). The sales and management cost ratio yoy+0.7pct is 18.8%; the R&D cost ratio yoy-2.7pct is 18.5%. Overall, Baidu's core OPM reached 21.5% in 24Q3, and the adjusted OPM was 25.1% (yoy+0pct, qoq-1.1pct).
Make improving AI capabilities a long-term strategic priority. (1) Application and user side: Wenxin said the average daily call volume reached 1.5 billion, and the number of users reached 0.43 billion; Baidu Library's AI users exceeded 0.23 billion, and AI functions were used 2.8 billion times. (2) Platform construction: Wenxin smart platform has 0.15 million enterprises and 0.8 million developers; the number of Flying Propeller Wenxin ecosystem developers reached 18.08 million, service companies 0.43 million, and created 1.01 million models; the Qianfan model helps users build 0.033 million large models and develop 0.77 million enterprise applications; over 60% of central enterprises and large-scale private enterprises choose Baidu Smart Cloud for AI Innovate. (3) AI big model: Wenxin's big model's inference efficiency increased by 48% and generated 1.7 TrillionToken; Speed Pro and Lite Pro models were launched to improve low latency, high throughput and accuracy.
The commercialization of intelligent driving continues to advance. The 24Q3 Radish Run achieved 0.988 million public travel services (yoy +20%), and the cumulative number of travel services exceeded 8 million as of October 28, 2024. The sixth-generation driverless vehicle, the RT6, has been put into operation in several cities.
Considering that the company's advertising business is adversely affected by macroeconomics, we expect the company's adjusted net profit to be 26.5/27.3/28.9 billion yuan (original forecast value 27.4/29.2/30.3 billion yuan). For reference, comparable companies maintained a 24-year adjusted PE of 12x, corresponding to the company's market capitalization of $317.7 billion, HKD to RMB 0.912, and a target price of HK$124.15, maintaining a “buy” rating.
Risk warning: AI commercialization falls short of expectations, advertising industry recovery falls short of expectations, R&D costs are too high and output is limited
