【招银国际】Improvement in fundamentals still takes time while new business on solid expansion track-250718（7页）.pdf

1、 PLEASE READ THE ANALYST CERTIFICATION AND IMPORTANT DISCLOSURES ON LAST PAGE MORE REPORTS FROM BLOOMBERG:RESP CMBR OR http:/.hk 1 MN 18 Jul 2025 CMB International Global Markets|Equity Research|Company Update Baidu(BIDU US)Improvement in fundamentals still takes time while new business on solid exp

2、ansion track For 2Q25E,we expect Baidu Core business revenue could reach RMB26.1bn,down 2%YoY,owing to determined business transformation to embed more Gen-AI related content in search results to improve user experience.However,such revenue may partly offset by solid cloud revenue growth,which we ex

3、pect to grow by 26%YoY.We are looking for RMB4.0bn non-GAAP net profit for Baidu Core in 2Q25E.Although Baidu has started preliminary tests for monetization of Gen-AI related content in late June,we expect that it will still prioritize user experience improvement over monetization in the near term,a

4、nd we are anticipating that the YoY decline in ads revenue growth will start to narrow in 4Q25E aided by ramp-up in monetization and easier comps in 4Q24.That said,Baidus new businesses are on a robust development track.Baidu and Uber have joined forces to accelerate autonomous vehicle deployment wo

5、rldwide outside the US and mainland China,which we view as a solid progress in exploring international expansion for Robotaxi business in an asset-light model.We fine-tune our SOTP-based target price to US$130.3(was US$144.6)mainly to reflect short-term earnings pressure from business transformation

6、,while we believe this is vital for long-term business development.Maintain BUY.Cloud business to sustain solid revenue growth momentum.We are anticipating Baidu Cloud revenue growth of 26%YoY in 2Q25E(2Q24:14%),driven by the continuously increase in AI related cloud demand.Cloud business should sus