Baidu Inc
Baidu Inc (NASDAQ: BIDU) is a Chinese language Internet search provider. The Company offers a Chinese language search platform on its Baidu.com Website that enables users to find information online, including Webpages, news, images, documents and multimedia files, through links provided on its Website. The Company operates through two segments, Baidu Core segment and iQIYI segment.
Recent Financial and Business Updates:
- Operational Highlights
- Corporate
- Baidu distributed USD 195 million to shareholders during Q1 2023.
- On May 12, 2023, Baidu released its annual ESG Report, which outlines the latest ESG policies and sustainability initiatives undertaken by the company.
- Intelligent Driving
- In Q1 2023, Baidu's autonomous ride-hailing service, Apollo Go, facilitated approximately 660,000 rides, marking a 236% increase year over year and an 18% increase quarter over quarter.
- On March 17, 2023, Apollo Go received the first permits from Beijing to operate ride-hailing services without a driver or safety operator in the vehicles.
- Other Growth Initiatives
- According to IDC and Canalys, Xiaodu secured the top position in smart display shipments and smart speaker shipments in China for 2022.
- Mobile Ecosystem
- In March, Baidu App's Monthly Active Users (MAUs) reached 657 million, showing a 4% increase year over year.
- Managed Page contributed 49% of Baidu Core's online marketing revenue in Q1 2023.
- iQIYI
- iQIYI's average daily number of total subscribing members for Q1 2023 was 129 million, compared to 101 million in Q1 2022 and 112 million in Q4 2022.
- First Quarter 2023 Financial Results
- Total revenues amounted to RMB 31.1 billion (USD 4.54 billion), registering a 10% year-over-year increase.
- Revenue from Baidu Core was RMB 23.0 billion (USD 3.35 billion), reflecting an 8% year-over-year increase. Online marketing revenue was RMB 16.6 billion (USD 2.42 billion), up 6% year over year, while non-online marketing revenue was RMB 6.4 billion (USD 928 million), up 11% year over year.
- iQIYI's revenue was RMB 8.3 billion (USD 1.22 billion), showing a 15% year-over-year increase.
- Cost of revenues decreased by 3% year over year to RMB 15.2 billion (USD 2.21 billion), primarily attributed to a decrease in content costs, bandwidth costs, and cost of goods sold, partially offset by an increase in traffic acquisition costs.
- Total other income, net was RMB 2.6 billion (USD 378 million), including a fair value gain of RMB 1.5 billion from long-term investments.
- Net income attributable to Baidu was RMB 5.8 billion (USD 848 million), and diluted earnings per ADS were RMB 15.92 (USD 2.32). Net income attributable to Baidu Core was RMB 5.5 billion (USD 803 million), and net margin for Baidu Core was 24%. Non-GAAP net income attributable to Baidu was RMB 5.7 billion (USD 834 million). Non-GAAP diluted earnings per ADS were RMB 16.10 (USD 2.34). Non-GAAP net income attributable to Baidu Core was RMB 5.3 billion (USD 767 million), and non-GAAP net margin for Baidu Core was 23%.
- Adjusted EBITDA was RMB 8.1 billion (USD 1.19 billion), and adjusted EBITDA margin was 26%. Adjusted EBITDA for Baidu Core was RMB 7.0 billion (USD 1.02 billion), and adjusted EBITDA margin for Baidu Core was 30%.
- As of March 31, 2023, cash, cash equivalents, restricted cash, and short-term investments totaled RMB 194.0 billion (USD 28.25 billion), and excluding iQIYI, the amount was RMB 188.8 billion (USD 27.49 billion). Free cash flow was RMB 4.5 billion (USD 661 million), and excluding iQIYI, the free cash flow was RMB 3.5 billion (USD 515 million).
Technical Observation (on the daily chart)
Currently, the stock is currently near an important resistance level of USD 140.00-USD 150.00, from where price has taken resistance in the past. A healthy correction from the resistance level is expected before a move towards upside. The RSI (14 period) momentum indicator is at a value of 48.73, with expectations of further consolidation or a short-term correction. Moreover, the price is currently positioned between both the 21-day SMA and 50-day SMA trend-following indicators, which may act as dynamic short-term resistance and support levels respectively.
As per the above-mentioned price action, recent key business and financial updates, momentum in the stock over the last month, expectations of results announcement, and technical indicators analysis, a ‘Watch’ rating has been given to Baidu Inc (NASDAQ: BIDU) at the current market price of USD 145.31 as of August 07, 2023, at 09:30 am PDT.
Individuals can evaluate the stock based on the support and resistance levels provided in the report in case of keen interest taking into consideration the risk-reward scenario.
Markets are trading in a highly volatile zone currently due to certain macro-economic issues and prevailing geopolitical tensions. Therefore, it is prudent to follow a cautious approach while investing.
Related Risk: This report may be looked at from a high-risk perspective and a recommendation is provided for a short duration. This report is solely based on technical parameters, and the fundamental performance of the stocks has not been considered in the decision-making process. Other factors which could impact the stock prices include market risks, regulatory risks, interest rates risks, currency risks, social and political instability risks etc.
How to Read the Charts?
The Green colour line reflects the 21-period simple moving average (SMA) while the red line indicates the 50- period simple moving average (SMA). SMA helps to identify existing price trends. If the prices are trading above the 21-period and 50-period moving average, then it shows prices are currently trading in a bullish trend.
The Black colour line in the chart’s lower segment reflects the Relative Strength Index (14-Period) which indicates price momentum and signals momentum in trend. A reading of 70 or above suggests overbought status while a reading of 30 or below suggests an oversold status.
The Blue colour bars in the chart’s lower segment show the volume of the stock. The volume is the number of shares that changed hands during a given day. Stocks with high volumes are more liquid than stocks with lesser volume as liquidity in stocks helps with easier and faster execution of the order.
The Orange colour lines are the trend lines drawn by connecting two or more price points and used for trend identification purposes. The trend line also acts as a line of support and resistance.
Technical Indicators Defined: -
Support: A level at which the stock prices tend to find support if they are falling, and a downtrend may take a pause backed by demand or buying interest. Support 1 refers to the nearby support level for the stock and if the price breaches the level, then Support 2 may act as the crucial support level for the stock.
Resistance: A level at which the stock prices tend to find resistance when they are rising, and an uptrend may take a pause due to profit booking or selling interest. Resistance 1 refers to the nearby resistance level for the stock and if the price surpasses the level, then Resistance 2 may act as the crucial resistance level for the stock.
Stop-loss: It is a level to protect further losses in case of unfavourable movement in the stock prices.
The reference date for all price data, currency, technical indicators, support, and resistance levels is August 07, 2023. The reference data in this report has been partly sourced from REFINITIV.
Abbreviations
CMP: Current Market Price
SMA: Simple Moving Average
RSI: Relative Strength Index
USD: United States dollar
Note: Trading decisions require a thorough analysis by individual. Technical reports in general chart out metrics that may be assessed by individuals before any stock evaluation. The above are illustrative analytical factors used for evaluating the stocks; other parameters can be looked at along with additional risks per se. Past performance is neither an indicator nor a guarantee of future performance.
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