Jinwu Financial News | Tianfeng Securities released research reports that Baidu Group's (09888) 24Q1AI cloud business revenue reached 4.5 billion yuan, achieving a 9% year-on-year increase. Benefiting from the impact of AI on cloud driving and the significant reduction in inference costs of the company's Wenxin model series, the superposition of the lightweight model compared to the open source model, the incremental focus of additional revenue from the cloud business has shifted from model training to model inference. The increase caused by the significant reduction in inference costs feeds back the cloud business, which is expected to drive the development of the cloud business.
According to the bank, Baidu continues to invest in the AI field, developing lightweight models around the idea of “MoE, small models, and smart devices”. Reasoning costs have been significantly reduced, call volume is expected to increase, and growth will occur in the medium to long term in the future.
According to the report, the company's FY2024-2026 revenue forecast was adjusted from 1459/1618/181 billion yuan to 1394/1538/171.2 billion yuan; non-GAAP operating profit was adjusted from 314/337/37.7 billion yuan to 279/321/35.7 billion yuan based on SOTP valuation, and Baidu's 2024 advertising, cloud business, and iQiyi's non-advertising business were rated at 8xP/E, 3XP/s, and 14xPE, corresponding to a target price of HK$139, maintaining a “buy” rating.