Jingwu Financial News | Orient Securities released a research report indicating that Baidu Group (09888) published its Q3 2024 financial report, with total revenue of 33.56 billion (down 2.6% year-on-year), basically in line with Bloomberg expectations; adjusted net income of 5.89 billion yuan (down 19% year-on-year), with a non-GAAP margin of 17.54%.
The firm noted that core advertising remains under pressure, while Asia Vets has driven better-than-expected growth in non-advertising business: In Q3 2024, Baidu achieved revenue of 33.56 billion (down 2.6% year-on-year), with core Baidu revenue of 26.5 billion (down 0.2% year-on-year, slightly better than Bloomberg's expectation of down 0.8% year-on-year), of which advertising marketing generated revenue of 18.8 billion (down 4.6%, with Bloomberg's consensus expectation at down 4.4%), and non-marketing revenue of 7.7 billion yuan (up 12.4%, better than Bloomberg's expectation of down 19.6% year-on-year), mainly driven by the Asia Vets business. Additionally, in Q3 2024, LoBo Kaipao recorded 0.988 million public transport service instances (up 20% year-on-year), with cumulative transport service instances exceeding 8 million as of October 28, 2024. The sixth-generation self-driving vehicles RT6 have been put into operation in multiple cities.
The firm continued to state that considering the adverse impact of the macroeconomic environment on the company's advertising business, it expects the company’s adjusted net income attributable to the parent to be 26.5/27.3/28.9 billion yuan (original forecast was 27.4/29.2/30.3 billion yuan). Referencing comparable companies, the target P/E for 2024 is maintained at 12x, corresponding to a market cap of 317.7 billion yuan, with the Hong Kong dollar to yuan exchange rate at 0.912, a target price of 124.15 Hong Kong dollars, and a "buy" rating is maintained.
