Jinwu Financial News | Soochow Securities released a research report indicating that Baidu Group (09888) Q3 2024 revenue meets market expectations, but adjusted net income falls short. In Q3 2024, the company’s revenue was 33.6 billion yuan, a year-on-year decrease of 3%, in line with consensus expectations; Non-GAAP operating profit was 7 billion yuan, down 8% year-on-year, weaker than consensus expectations; Non-GAAP net profit was 5.9 billion yuan, down 19% year-on-year, also weaker than consensus expectations. Starting from Q3 2024, the company repurchased shares worth 0.161 billion dollars, with the cumulative repurchase amount under the 2023 repurchase plan reaching approximately 1.4 billion dollars.
The bank stated that Baidu’s core revenue for Q3 2024 was 26.5 billion yuan, unchanged year-on-year, and in line with Bloomberg's consensus expectations. Among this, online marketing revenue amounted to 18.8 billion yuan, a decrease of 4% year-on-year. Advertisers are still maintaining a cautious attitude towards advertising spending, especially small and medium-sized advertisers in various offline industries have yet to restore their willingness to invest. Additionally, the company's accelerated promotion of generative AI in transforming search products has also affected short-term monetization efficiency. In the Q3 earnings conference, it was mentioned that currently over 20% of search results include generative AI content, an increase from the 18% mentioned in the Q2 earnings conference. Q4 advertising business is expected to remain weak, but considering that generative AI is beneficial for increasing user engagement, and it has advantages over traditional advertising systems in terms of conversion rates and efficiency, the bank believes that its positive impact on Baidu's advertising business is still worth looking forward to in the medium to long term.
The bank continued to point out that the company's Q3 profit was weaker than expected, and they have lowered the company's Non-GAAP net profit forecast for 2024-2026 from 27.2/29.5/31.6 billion yuan to 27.1/28.6/31 billion yuan, corresponding to a Non-GAAP PE of 8 times for 2024. The company’s continued share buybacks reflect an emphasis on shareholder returns, maintaining a 'buy' rating.
