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<Research>UBS Slashes BIDU-SW (09888.HK) TP to $119 as It Waiting for Core Ads Growth to Turn Around
Recommend 9 Positive 11 Negative 9 |
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BIDU-SW (09888.HK)'s 3Q24 revenue was in line with expectation, while gross profit margin slightly beat estimation, UBS released a research report saying. Core advertising revenue fell 4.5% YoY. The Company is actively rolling out AI-enabled search upgrades to more users, with over 20% of search queries and 70% of Baidu app MAU adopting AI-enabled search results in 3Q24. UBS lowered its 4Q24/ 2025 core advertising revenue forecasts by 2.8%/ 2.9% each to reflect weaker than expected advertising growth and a more conservative outlook for 2025 advertising market. Due to the pressure on revenue, the broker cut its 4Q24/ 2025 core operating margin anticipations by 1.9 ppts/ 1 ppt to 20.5%/ 23.3%, respectively. UBS added that it is waiting for the Group's core advertising growth to turn around. Therefore, the broker slashed its target price for the Group's H-shares from $139 to $119, with rating kept at Buy. AAStocks Financial News |
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