DATE: MAY 27 2022
(Yicai Global) May 27 — Baidu’s shares surged after the Chinese search engine giant posted better-than-expected first-quarter earnings thanks to rapid growth at its non-advertising business represented by cloud and artificial intelligence services.
Baidu [HKG: 9888] ended 14.3 percent higher at HKD132.20 (USD16.84) in Hong Kong today, after surging by as much as 16.1 percent at one point. In New York yesterday, the firm’s stock [NASDAQ: BIDU] closed up 14.1 percent at USD136.19.
Revenue rose 1 percent to CNY28.4 billion (USD4.24 billion) in the three months ended March 31, according to the Beijing-based company earnings report released before the US market opened yesterday. That was the smallest gain in six quarters, but beat the market consensus for CNY27.8 billion.
Baidu posted a net loss of CNY885 million (USD131.9 million) in the quarter, versus a CNY2.6 million profit a year ago, because of CNY3 billion hit from changes in the fair value of investments. But adjusted earnings before interest, taxes, depreciation and amortization stood at CNY5.5 billion, compared with the CNY3.4 billion that analysts had predicted.
“Revenues from Baidu Core remained healthy with non-ad revenues increasing by 35 percent year over year, driven by Baidu AI Cloud, which grew 45 percent year over year in the quarter,” Chief Financial Officer Luo Rong said.
Online marketing remained Baidu’s main source of income despite quick development of the smart cloud business, contributing CNY15.7 billion, down 4 percent on the year.
“Since mid-March, our business has been negatively impacted by the recent Covid-19 resurgence in China,” founder Robin Li said. “Although challenges related to the virus continue to pressure our near-term business operations, we remain confident that our new AI businesses will boost the long-term growth of Baidu and contribute to China’s innovation-driven economy and sustainable development.”
Jidu Auto, a smart vehicle joint venture between Baidu and Geely Automobile Holdings, is expected to accept orders in the second half of this year, with deliveries set to begin next year, Li said later on an earnings conference call.
Editor: Tom Litting