研究报告全文：MN23Feb2023CMBInternationalGlobalMarketsEquityResearchCompanyUpdateBaiduBIDUUSStrongAIcapabilitytoempowerbusinessgrowthTargetPriceUS19630Baiduannounced22Febits4Q22andfullyearresultsquarterlyrevenuewasPreviousTPUS1952RMB331bnflatYoY43higherthanourforecastBloombergconsensusUpDownside394estimatesnon-GAAPnetincomewasRMB54bn713higherthanourCurrentPriceUS14082forecastBloombergconsensusestimatesdrivenbystringentcostcontrolNon-adrevenuewasup10YoYandaccountedfor30ofBaiduCorerevenueChinaInternet4Q2126For2022BaiduCorerevenuewasflatYoYatRMB954bnwhileSaiyiHECFAnon-GAAPOPwasdown6YoYtoRMB209bnduetosoftadvertisingbusiness85239161739performanceinwhichrevenuewasdown6YoYamidmacroheadwindshesaiyicmbicomhkDevelopmentofBaidusautonomousdrivingandAInewinitiativesisontrackinourviewandcoreadsbusinesswillprovidestrongcashflowsupportforfutureYeTAOfranktaocmbicomhkdevelopmentWeliftourSOTPbasedTPby1toUS1963toreflectpotentialbetterthanexpectedrecoveryofcoreadsbusinessMaintainBUYJiSHICFACloudbusinesssawgradualrecoveryanddevelopmentofotherAInew85237618728shijicmbicomhkinitiativesisontrackOwningtopandemicwhichimpactedprojectdeploymentBaiduCloudrevenuegrewmerely4YoYtoRMB51bninWentaoLU4Q22butwasup23YoYin2022Managementnotedgradualrecoveryluwentaocmbicomhkforcloudrevenuegrowthgiventheresumptionofprojectdeploymentbutexpectsrevenuerecognitiontobeback-loadedin2023In4Q22ridesSophieHUANGsophiehuangcmbicomhkprovidedbyApolloGoweremorethan561000up162YoYand18QoQBaidusACEAutonomousdrivingconnectedroadefficientmobilitysmarttransportationhasbeenadoptedby69citiesin4Q224Q213Q223563EasonXUeasonxucmbicomhkcitiesbasedoncontractamountsofoverRMB10mnCoreadsbusinessonsolidrecoverytrackBaiduCorerevenuewasdownby12YoYtoRMB257bnin4Q22776oftotalrevenueduetoStockDatapandemicimpactbut4higherthanourestimateInDecember2022MAUsMktCapUSmn494454Avg3mthstoUSmn1269ofBaiduappwere648mnup4YoYManagementnotedthatBaiduCore52wHighLowUS162867657adsbusinesshasseenarecoveryfromtroughanditremainspositiveontheTotalIssuedSharesmn3511recoveryaheaddrivenbydemandrecoveryBaiduhasrelativelargerSourceFactSetexposurethanitspeersonadsverticalsthataresensitivetoofflineactivitiesShareholdingStructuresuchasfranchisinglifestyletravelwhichcouldbenefitmorefrompostRobinYanhongLi165pandemicrecoveryinourviewWeforecastBaiduCoreadsbusinessrevenueSourceHKExtoreachRMB755bnin2023Eup89YoYpreviousforecast74SharePerformanceFocusingondrivingefficiencyimprovementwhileremainscommittedAbsoluteRelativetoinvestforlong-termgrowthdriversBaidusGPMwas488in4Q221-mth37-20up11ppYoYandwas24ppbetterthanourforecastdrivenbybeatonGPM3-mth4893936-mth91175ofbothiQIYIandBaiduCorebusinessaidedbycontentcostoptimizationSourceFactSetDuetostringentthanexpectedcostcontrolnon-GAAPOPMforBaiduGroupBaiduCorewas196214betterthanourforecastat16819812-mthPricePerformanceManagementguidedtodriveforcloudmarginimprovementin2023andtheywillremainfocusedoncoreindustriestoenhancecompetitiveedgeThecompanywillstaycommittedtoinvestinautonomousdrivingandAInewinitiativestosupportlong-termgrowthEarningsSummaryYE31DecFY21AFY22AFY23EFY24EFY25ESourceFactSetRevenueRMBmn124493123675136974147086163500YoYgrowth1630710874112AdjustednetprofitRMBmn188300206800224689248659293235AdjNPconsensusRMBmn215657253305314370EPSAdjustedRMB53535890633669428106PEx423401216191156SourceCompanydataBloombergCMBIGMestimatesPLEASEREADTHEANALYSTCERTIFICATIONANDIMPORTANTDISCLOSURESONLASTPAGE1MOREREPORTSFROMBLOOMBERGRESPCMBRGOORhttpwwwcmbicomhk23Feb2023Figure1Baiduquarterlyfinancialresults4Q22RMBbn4Q201Q212Q213Q214Q211Q222Q223Q224Q22DiffConsensusBaiduGroupOnlinemarketing20718120821120716918319919619221YoYgrowth-032701784201-64-123-53-56Otherservices9610010510912411511412613513319YoYgrowth1772092613542941448115992Totalrevenue30328131431933128429632533132132YoYgrowth482482041319310-541900Grossprofit15713115515815812914516316115538Operatingprofit50283523202634534638212Non-GAAPnetprofit69435451413955595447134YoYgrowth-25395-27-41-1031632GPM52046749349547745348850048848503pptOPM1649911072599211516313911821pptNon-GAAP15pptNPM227153171159123137187181162148BaiduCoreRevenue23120524024726021423225225725122YoYgrowth6434227015312444-3723-12Non-GAAPOP8051655848375167555099Non-GAAPNP75495959463854584943132YoYgrowth-2437851-218-386-219-83-1563Non-GAAP15pptOPM348247269236187172221264214199Non-GAAP19pptNPM326238247237178178235228192173SourceCompanydataBloombergCMBIGMChangesinforecastandvaluationFigure2BaiduforecastrevisionCurrentPreviousChangeRMBbn2023E2024E2025E2023E2024E2023E2024ERevenue137014711635134714481715GrossProfit6687268236537122219Non-GAAPnetprofit2252492932202421928GrossMargin48749450348549202ppt02pptNon-GAAPnetmargin16416917916416700ppt02pptSourceCMBIGMestimatesPLEASEREADTHEANALYSTCERTIFICATIONANDIMPORTANTDISCLOSURESONLASTPAGE223Feb2023Figure3BaiduCorebusinesssegmentforecastrevisionCurrentPreviousChangeRMBbn2023E2024E2025E2023E2024E2023E2024ERevenue106411511300104311282020Non-GAAPGrossProfit5926417255816291818Non-GAAPOperatingProfit2382623032262455371Non-GAAPnetprofit2122332732102280921Non-GAAPGPM43243644443243400ppt01pptNon-GAAPOPM17317818516716906ppt09pptNon-GAAPNPM155158167156157-01ppt01pptSourceCMBIGMestimatesFigure4CMBIGMestimatesvsBloombergconsensusCurrentConsensusDiffRMBbn2023E2024E2025E2023E2024E2025E2023E2024E2025ERevenue13-1120137014711635135214871603GrossProfit13-1219668726823659735808Non-GAAPnetprofit42-18-67225249293216253314GrossMargin48749450348749450400ppt-01ppt00pptNon-GAAPnetmargin16416917915917019605ppt-01ppt-17pptSourceBloombergCMBIGMestimatesSOTPvaluationofUS1963perADSOurSOTPbasedtargetpriceisUS1963whichcomprisesperADS1US604priorUS591forBaiduCoremainbusinessexcludingApolloandBaiduCloudmainlyincludingthecoresearchandfeedadsbusinessbasedonunchanged70x2023Enon-GAAPPETheliftinvaluationismainlyduetoaliftinnon-GAAPnetincomeforecastdrivenbypotentialbetterthanexpectedrecoveryofadsbusiness2US228priorUS225forApolloASDbasedon20x2030Erevenueanddiscountedbackusinga130WACCTheslightuptickinvaluationismainlyduetotheshrinkinsharebaseduetoBaidussharebuyback3US403priorUS404forBaiduCloudbasedonunchanged48x2023EPSItisinlinewiththetargetmultiplethatwearegivingtoitsChinesecloudpeersbutbelowtheaverageof59xFig5foroverseascomparablecompaniesbecauseitscloudrevenueisonasmallerscale4US586netcashpriorUS6035US142priorUS129foriQIYIandotherinvestmentswitha30holdingdiscountappliedtothesharepriceofUS204asofmarketcloseon21Feb2023Figure5BaiduSOTPvaluationValuationValuationNOPATValuationValuationValuationBaidusofBaidusSegmentUSDADSasofUSmnmethodmultipleRMBmnUSmnstakestaketotalUSmnCorebusinessandcash1Baiducoreex-ApolloandCloud305870x2023EPE148222214041000214046043072ApolloASD559268076100080762281163BaiduCloudex-ASD48x2023EPS9898514294100014294403205PLEASEREADTHEANALYSTCERTIFICATIONANDIMPORTANTDISCLOSURESONLASTPAGE323Feb20234Netcash14391620782100020782586299Valuationofcorebusinessandcash645561820927iQIYIandstrategicinvestment1iQIYIMarketvalue4744668515153528992TripcomgroupMarketvalue161126232671082513713UxinMarketvalue7641109110004HANDEnterpriseSolutionsMarketvalue1011114605377025KuaishouMarketvalue2178483145831977286YusysTechnologiesMarketvalue1526022045111303ValuationofiQIYIandinvestments7218204ValuationofiQIYIandinvestmentwith30holding5053142discount73TotalBaiduvaluationUSmn69609NumberofADSoutstandingmn355ValuationperADSUS1963SourceCompanydataCMBIGMestimatesNote1AmericandepositaryshareADSiQIYIIQUSTripcomGroupTCOMUSUxinUXINUSHANDEnterprisesolution300170SHKuaishou1024HKYusysTechnologies300674SH2dataasof21Feb2023marketcloseOurtargetpricetranslatesinto215196x20232024EPEonnon-GAAPbasisor150137xifexcludingnetcashOurprevioustargetpriceofUS1952translatedinto220x2023EPEFigure6CloudcomputingpeersvaluationcompsCompaniesTickerPriceRevenuegrowthYoYPSxUS20222023E2024E20222023E2024EMicrosoftMSFTUS254111484115938577GoogleGOOGUS9199217574504340SalesforceCRMUS1645174102121534843Average655953SourceBloombergCMBIGMNotedataasof21Feb2023PLEASEREADTHEANALYSTCERTIFICATIONANDIMPORTANTDISCLOSURESONLASTPAGE423Feb2023FinancialSummaryINCOMESTATEMENT2020A2021A2022A2023E2024E2025EYE31DecRMBmnRevenue107074124493123675136974147086163500Costofgoodssold551586431463935702067448281196Grossprofit519166017959740667687260582304Operatingexpenses375764966143829468944969554408SGAexpense180632472320514220532338725670RDexpense195132493823315248412630928738Operatingprofit143401051815911198742290927897ShareoflossesprofitsofassociatesJV224893219101001633261AdjustedEBITDA275042491429663336493720042812NetInterestincomeexpense225521303332236431603491Foreignexchangegainloss6601001484000Otherincomeexpense940310385737000Pre-taxprofit230901077810112212362543631127Incometax406431872578479665177709Aftertaxprofit1902675917534164411891923418Minorityinterest34462635256729261232Netprofit22472102267559157691799322186Adjustednetprofit220201883020680224692486629323BALANCESHEET2020A2021A2022A2023E2024E2025EYE31DecRMBmnCurrentassets183342213315212850235866266945304052Cashequivalents35782368505315676385105554139680Restrictedcash7581082111330113301133011330Accountreceivables8668998111733101321088012095Othercurrentassets138134155663136631138019139180140948Non-currentassets149366166719178123165177162586159879PPE175082302723973163301509213759Intangibles8457894780952792143964Goodwill222482260522477224772247722477Othernon-currentassets101153112140123578123578123578123578Totalassets332708380034390973401043429530463931Currentliabilities683857448879630854408763490209Short-termborrowings301641685343534353435343Accountpayables367164138438014424064352144347Othercurrentliabilities286532893636273376913876940520Non-currentliabilities724808159473538627466137760672Long-termborrowings01262913722000Bondpayables603355577249461523915102250317Obligationsunderfinanceleases469355694810481048104810Deferredincome97129159159159159Othernon-currentliabilities735574955386538653865386Totalliabilities140865156082153168148186149010150881Sharecapital000000Capitalsurplus472134754847883482184855348888Retainedearnings135483163911175595190312217640249835Otherreserves310271488393839383938393Totalshareholdersequity185798218607231871246923274586307116Minorityinterest604553455934593459345934Totalequityandliabilities332708380034390973401044429530463931PLEASEREADTHEANALYSTCERTIFICATIONANDIMPORTANTDISCLOSURESONLASTPAGE523Feb2023CASHFLOW2020A2021A2022A2023E2024E2025EYE31DecRMBmnOperatingProfitbeforetaxation230901077810112212362543631127Depreciationamortization18180164385126494646854364Taxpaid406431872578479665177709Changeinworkingcapital182071869127506022285406Others52011478416260748877258093Netcashfromoperations242002012226170348973161335469InvestingCapitalexpenditure5084108963180251519891573Acquisitionofsubsidiariesinvestments23962470000Netproceedsfromdisposalofshort-term48600000investmentsOthers195862030176413010484Netcashfrominvesting27552314443944264520941657FinancingNetborrowings12390884013331372200Sharerepurchases1305475810000Others63292213750573949351314Netcashfromfinancing56652339663909773351314NetchangeincashCashatthebeginningoftheyear3443936540476716523687715116884Exchangedifference2129431729000Cashattheendoftheyear36540476716523687715116884151010GROWTH2020A2021A2022A2023E2024E2025EYE31DecRevenue031630710874112Grossprofit1651590711887134Operatingprofit1274267513249153218Netprofit99255452611086141233Adjnetprofit2111459887107179PROFITABILITY2020A2021A2022A2023E2024E2025EYE31DecGrossprofitmargin485483483487494503Operatingmargin13484129145156171Adjnetprofitmargin206151167164169179ReturnonequityROE1285134666976GEARINGLIQUIDITYACTIVITIES2020A2021A2022A2023E2024E2025EYE31DecNetdebttoequityx050505060607Currentratiox272927283034Receivableturnoverdays270270316287257253Payableturnoverdays226521862235206220771948VALUATION2020A2021A2022A2023E2024E2025EYE31DecPE131423401216191156PEdiluted132432405218193158PB162013141311PCFPS155479133106117103SourceCompanydataCMBIGMestimatesNoteThecalculationofnetcashincludesfinancialassetsPLEASEREADTHEANALYSTCERTIFICATIONANDIMPORTANTDISCLOSURESONLASTPAGE623Feb2023DisclosuresDisclaimersAnalystCertificationTheresearchanalystwhoisprimaryresponsibleforthecontentofthisresearchreportinwholeorinpartcertifiesthatwithrespecttothesecuritiesorissuerthattheanalystcoveredinthisreport1alloftheviewsexpressedaccuratelyreflecthisorherpersonalviewsaboutthesubjectsecuritiesorissuerand2nopartofhisorhercompensationwasisorwillbedirectlyorindirectlyrelatedtothespecificviewsexpressedbythatanalystinthisreportBesidestheanalystconfirmsthatneithertheanalystnorhisherassociatesasdefinedinthecodeofconductissuedbyTheHongKongSecuritiesandFuturesCommission1havedealtinortradedinthestockscoveredinthisresearchreportwithin30calendardayspriortothedateofissueofthisreport2willdealinortradeinthestockscoveredinthisresearchreport3businessdaysafterthedateofissueofthisreport3serveasanofficerofanyoftheHongKonglistedcompaniescoveredinthisreportand4haveanyfinancialinterestsintheHongKonglistedcompaniescoveredinthisreportCMBIGMRatingsBUYStockwithpotentialreturnofover15overnext12monthsHOLDStockwithpotentialreturnof15to-10overnext12monthsSELLStockwithpotentiallossofover10overnext12monthsNOTRATEDStockisnotratedbyCMBIGMOUTPERFORMIndustryexpectedtooutperformtherelevantbroadmarketbenchmarkovernext12monthsMARKET-PERFORMIndustryexpectedtoperformin-linewiththerelevantbroadmarketbenchmarkovernext12monthsUNDERPERFORMIndustryexpectedtounderperformtherelevantbroadmarketbenchmarkovernext12monthsCMBInternationalGlobalMarketsLimitedAddress45FChampionTower3GardenRoadHongKongTel85239000888Fax85239000800CMBInternationalGlobalMarketsLimitedCMBIGMisawhollyownedsubsidiaryofCMBInternationalCapitalCorporationLimitedawhollyownedsubsidiaryofChinaMerchantsBankImportantDisclosuresTherearerisksinvolvedintransactinginanysecuritiesTheinformationcontainedinthisreportmaynotbesuitableforthepurposesofallinvestorsCMBIGMdoesnotprovideindividuallytailoredinvestmentadviceThisreporthasbeenpreparedwithoutregardtotheindividualinvestmentobjectivesfinancialpositionorspecialrequirementsPastperformancehasnoindicationoffutureperformanceandactualeventsmaydiffermateriallyfromthatwhichiscontainedinthereportThevalueofandreturnsfromanyinvestmentsareuncertainandarenotguaranteedandmayfluctuateasaresultoftheirdependenceontheperformanceofunderlyingassetsorothervariablemarketfactorsCMBIGMrecommendsthatinvestorsshouldindependentlyevaluateparticularinvestmentsandstrategiesandencouragesinvestorstoconsultwithaprofessionalfinancialadvisorinordertomaketheirowninvestmentdecisionsThisreportoranyinformationcontainedhereinhavebeenpreparedbytheCMBIGMsolelyforthepurposeofsupplyinginformationtotheclientsofCMBIGMoritsaffiliatestowhomitisdistributedThisreportisnotandshouldnotbeconstruedasanofferorsolicitationtobuyorsellanysecurityoranyinterestinsecuritiesorenterintoanytransactionNeitherCMBIGMnoranyofitsaffiliatesshareholdersagentsconsultantsdirectorsofficersoremployeesshallbeliableforanylossdamageorexpensewhatsoeverwhetherdirectorconsequentialincurredinrelyingontheinformationcontainedinthisreportAnyonemakinguseoftheinformationcontainedinthisreportdoessoentirelyattheirownriskTheinformationandcontentscontainedinthisreportarebasedontheanalysesandinterpretationsofinformationbelievedtobepubliclyavailableandreliableCMBIGMhasexertedeveryeffortinitscapacitytoensurebutnottoguaranteetheiraccuracycompletenesstimelinessorcorrectnessCMBIGMprovidestheinformationadvicesandforecastsonanASISbasisTheinformationandcontentsaresubjecttochangewithoutnoticeCMBIGMmayissueotherpublicationshavinginformationandorconclusionsdifferentfromthisreportThesepublicationsreflectdifferentassumptionpoint-of-viewandanalyticalmethodswhencompilingCMBIGMmaymakeinvestmentdecisionsortakeproprietarypositionsthatareinconsistentwiththerecommendationsorviewsinthisreportCMBIGMmayhaveapositionmakemarketsoractasprincipalorengageintransactionsinsecuritiesofcompaniesreferredtointhisreportforitselfandoronbehalfofitsclientsfromtimetotimeInvestorsshouldassumethatCMBIGMdoesorseekstohaveinvestmentbankingorotherbusinessrelationshipswiththecompaniesinthisreportAsaresultrecipientsshouldbeawarethatCMBIGMmayhaveaconflictofinterestthatcouldaffecttheobjectivityofthisreportandCMBISwillnotassumeanyresponsibilityinrespectthereofThisreportisfortheuseofintendedrecipientsonlyandthispublicationmaynotbereproducedreprintedsoldredistributedorpublishedinwholeorinpartforanypurposewithoutpriorwrittenconsentofCMBIGMAdditionalinformationonrecommendedsecuritiesisavailableuponrequestForrecipientsofthisdocumentintheUnitedKingdomThisreporthasbeenprovidedonlytopersonsIfallingwithinArticle195oftheFinancialServicesandMarketsAct2000FinancialPromotionOrder2005asamendedfromtimetotimeTheOrderorIIarepersonsfallingwithinArticle492atodHighNetWorthCompaniesUnincorporatedAssociationsetcoftheOrderandmaynotbeprovidedtoanyotherpersonwithoutthepriorwrittenconsentofCMBIGMForrecipientsofthisdocumentintheUnitedStatesCMBIGMisnotaregisteredbroker-dealerintheUnitedStatesAsaresultCMBIGMisnotsubjecttoUSrulesregardingthepreparationofresearchreportsandtheindependenceofresearchanalystsTheresearchanalystwhoisprimaryresponsibleforthecontentofthisresearchreportisnotregisteredorqualifiedasaresearchanalystwiththeFinancialIndustryRegulatoryAuthorityFINRATheanalystisnotsubjecttoapplicablerestrictionsunderFINRARulesintendedtoensurethattheanalystisnotaffectedbypotentialconflictsofinterestthatcouldbearuponthereliabilityoftheresearchreportThisreportisintendedfordistributionintheUnitedStatessolelytomajorUSinstitutionalinvestorsasdefinedinRule15a-6undertheUSSecuritiesExchangeActof1934asamendedandmaynotbefurnishedtoanyotherpersonintheUnitedStatesEachmajorUSinstitutionalinvestorthatreceivesacopyofthisreportbyitsacceptancehereofrepresentsandagreesthatitshallnotdistributeorprovidethisreporttoanyotherpersonAnyUSrecipientofthisreportwishingtoeffectanytransactiontobuyorsellsecuritiesbasedontheinformationprovidedinthisreportshoulddosoonlythroughaUS-registeredbroker-dealerForrecipientsofthisdocumentinSingaporeThisreportisdistributedinSingaporebyCMBISingaporePteLimitedCMBISGCompanyRegnNo201731928DanExemptFinancialAdviserasdefinedintheFinancialAdvisersActCap110ofSingaporeandregulatedbytheMonetaryAuthorityofSingaporeCMBISGmaydistributereportsproducedbyitsrespectiveforeignentitiesaffiliatesorotherforeignresearchhousespursuanttoanarrangementunderRegulation32CoftheFinancialAdvisersRegulationsWherethereportisdistributedinSingaporetoapersonwhoisnotanAccreditedInvestorExpertInvestororanInstitutionalInvestorasdefinedintheSecuritiesandFuturesActCap289ofSingaporeCMBISGacceptslegalresponsibilityforthecontentsofthereporttosuchpersonsonlytotheextentrequiredbylawSingaporerecipientsshouldcontactCMBISGat6563504400formattersarisingfromorinconnectionwiththereportPLEASEREADTHEANALYSTCERTIFICATIONANDIMPORTANTDISCLOSURESONLASTPAGE7