Haitong int'l released a report indicating that the forecast for baidu-SW (BIDU.US) core advertising for the fourth quarter remains unchanged, with a previously estimated annual growth rate of -9.5% and a 13% annual growth rate for cloud services. Considering the recent organizational adjustments at baidu (BIDU.US), the turnover composition shifting to lower profit businesses, and LLM-related investments, the forecast for the fourth quarter Non-GAAP core operating profit margin has been lowered from 21% to 19%. Therefore, the forecasts for the 2024 fiscal year's core revenue and Non-GAAP core operating profit are 102.7 billion yuan and 24.3 billion yuan respectively, with a corresponding profit margin of 24%, a year-on-year decrease of 0.5 percentage points.

Haitong int'l expects that baidu's core advertising business will still be under pressure in the first quarter of next year, but is anticipated to improve gradually each quarter due to macroeconomic recovery and LLM-driven increase in advertising demand. The firm pointed out that baidu's outlook is conservative, with the target price lowered from $108 to $102, maintaining an 'outperform the market' rating.