Baidu.com (BIDU US & 9888 HK): 2Q26 preview: Revenue de-risked, earnings not yet; debate is on Kunlunxin execution and mix-shift proof

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Baidu.com (BIDU US & 9888 HK): 2Q26 preview: Revenue de-risked, earnings not yet; debate is on Kunlunxin execution and mix-shift proof

Asia Pacific Equity Research

17 July 2026

Baidu.com (BIDU US & 9888 HK)

2Q26 preview: Revenue de-risked, earnings not yet;

debate is on Kunlunxin execution and mix-shift proof

We see the 2Q26 print as de-risked on revenue but not earnings. Since sell-side China

estimate calibration began on Jul 13, Bloomberg consensus 2026 revenue has been Head of China Equity Research

cut by 1% and adjusted EPS by 5%, while the stock has fallen 7% (vs HSI +2%), and Co-Head of Asia TMT

implying incremental de-rating. We attribute this primarily to Kunlunxin IPO Research

timing anxiety and secondarily to sector flows that keep China internet as the Alex Yao AC

funding leg for AI hardware longs. The revenue reset looks largely complete; the (86 21) 6106 6505

profit reset does not. Our adjusted net income of RMB3.7bn, down 23% YoY, still alex.yao@jpmorgan.com

sits 12% below consensus of RMB4.2bn. If we are right, the quarter carries SAC Registration Number: S1730523020001

residual earnings downside even after the recent cuts. We forecast group revenue Daniel Chen

of RMB31.5bn, down 4% YoY and roughly 3% below consensus (RMB32.6bn), (86-21) 6106 6205

daniel.q.chen@jpmorgan.com

grounded in the reported 1Q trajectory, soft macro advertising data, and SAC Registration Number: S1730521040001

management's public cash-cow framing of search at the JPM China Summit. Nancy Liu

Maintain Overweight and adjust PTs to US$205/HK$200. (86 21) 6106 6343

• The setup. 2Q26 revenue reset is largely done, in our view. Online Marketing nancy.liu@jpmorgan.com

Services fell 22% YoY in 1Q26 with no stabilization signal. We model 2Q26 SAC Registration Number: S1730524090001