First Read: Baidu, Inc. "AIC 2026: Strengthening full-stack AI capability" (Buy)

研报英文原文证据摘录

First Read: Baidu, Inc. "AIC 2026: Strengthening full-stack AI capability" (Buy)

ly UBS Cons.

supported by the ongoing increase in cloud demand across industries, as well as the 12/26E 56.27 53.70

scaling up of its GPU Cloud and Kunlunxin. The optimising product mix toward higher- 12/27E 56.41 59.89

margin businesses (e.g., GPU Cloud), along with improving pricing power amid a supply- 12/28E 63.54 72.81

constrained market, could drive margin expansion over time.

Wei Xiong

Analyst

Other business updates

wei.xiong@ubs.com

On Kunlunxin, management is positive on the TAM for domestic AI chips, driven by +86-21-3866 8883

compute localisation especially for inference workload, and highlighted Kunlunxin's

Kenneth Fong

unique advantages in performance, CUDA compatibility, diverse client base, and clear

roadmap for future product upgrade to support growth sustainability ahead. On capex, kenneth-kc.fong@ubs.com

management expects capex to increase YoY in 2026, but emphasised ROI discipline and +852-3712 3890

more optimised resource allocation, including GPU server deployment. On margin,

Charles Chen

management pointed out that its continued operational efficiency gain and cost Analyst

optimisation efforts, together with a structural improvement in business mix, should S1460524020001

help group margin increase over time. charles-za.chen@ubs.com

+86-21-3866 8907

Valuation: maintain Buy and PT of US$180

Our SOTP-based PT assumes a 4x PE for Core ads, 3x P/S for Cloud, US$57/share for

Kunlunxin, US$7/share for Apollo Go (benchmarking Pony.AI's market cap) and net cash

and long-term investments. Our PT for 9888.HK is HK$175 .

Highlights (Rmbm) 12/23 12/24 12/25 12/26E 12/27E 12/28E 12/29E 12/30E

Revenues 134,598 133,125 129,079 132,372 142,153 152,082 160,152 168,709