【行业研究报告】百度-3Q25 preview: expecting inline results and more updates from new businesses

3Q25preview:expectinginlineresultsand
moreupdatesfromnewbusinessesx
For3Q25E,weexpectBaiduCorebusinessrevenuecouldreachRMB24.6bn,
down7%YoY,owingtoongoingtransformationinadsbusiness,whilepartly
offsetbysolidcloudrevenuegrowth,whichweanticipatetobe20%YoY.We
arelookingforRMB2.1bnnon-GAAPOPforBaiduCorein3Q25E,inlinewith
Bloombergconsensus.Recoveryincoreadslikelystilltakestime,inourview,
whilenewadsgrowthdrivers,suchasagent-relatedadsanddigitalhuman,are
inthemaking.Coreadsbusinessandcashinhandarekeyfactorstosupport
valuation,inourview,whilefurthervaluationreratingopportunitiescouldarise
from:1)morevisibilityonoperatingmetricsofcloudbusiness;2)moreupdates
onRobotaxiandAI-relatednewbusinesses;3)potentialoptimizationinuseof
cashonhandtofurtherenhanceshareholderreturn.WeliftourSOTP-based
targetpricetoUS$148.4(wasUS$132.0)toreflectamorepositivedevelopment
outlookofcloudbusiness.MaintainBUY.
Publiccloudtosustainsolidgrowthmomentum.Weareanticipating
BaiduCloudrevenuegrowthof20%YoYin3Q25E(3Q24:11%;2Q25:
BaiduCloudrevenuegrowthof20%YoYin3Q25E(3Q24:11%;2Q25:
27%),drivenbyrobustpubliccloudrevenuegrowthboostedbytheAI-
relateddemand.Weexpectmorevisibilityonoperatingmetricsofboth
personalcloud(suchasNetDiskandWenku)andpubliccloudbusinessto
propelvaluationreratingforcloudbusinessinthecomingquarters.
Recoveryincoreadslikelystilltakestime,whilenewgrowthdrivers
areinthemaking.WithinBaiduCorebusiness,wearelookingfora22.5%
YoYrevenuedeclineforadsbusinessin3Q25E,owingtotheongoing
businesstransformation,whileexpectingthedeclinetonarrowto16.5%
YoYin4Q25Eduetothegradualkick-offofmonetizationforGen-AIrelated
searchresultsandincrementaladsrevenuegeneratedfromnewadsformat
suchasagent-relatedadsanddigitalhuman.In2Q25,revenuegenerated
byagentsforadvertisers/digitalhuman-relatedadsgrew50/55%QoQand
contributed13/3%ofBaiduCore’sonlinemarketingrevenue,andweexpect
thecontributiontocontinuerampingupinthecomingquarters.Weighedby
businessadjustmentsinthenearterm,weestimateBaiduCorehas
achievednon-GAAPOPofRMB2.1bnin3Q25E(3Q24:RMB6.7bn),inline
withconsensus.
Potentialoptimizationinuseofcashtoprovidefurthervaluation
support.Asofend-2Q25,Baiduhadcash,cashequivalents,restricted
cashandshort-terminvestmentofRMB124.2bn,andthecash,cash
equivalents,short-terminvestment,long-termdepositsandheld-to-maturity
investmentforBaiduCorewasRMB229.7bn.Thepotentialdisposalofnon-
coreassets,aswellasoptimizationinuseofcashinhandtoenhance
shareholderreturnshouldhelpprovidefurthervaluationsupport,inour
view.