Sealand Securities released a research report projecting BIDU-SW's (09888) 2025–2027 revenue at RMB 130.97 billion, RMB 135.67 billion, and RMB 144.31 billion, respectively, with non-HKFRS net profits of RMB 16.60 billion, RMB 19.86 billion, and RMB 23.55 billion. The corresponding non-HKFRS P/E ratios stand at 19.1x, 16.0x, and 13.5x, warranting a maintained "Buy" rating.

**Key Insights:**

**Baidu Group: Full-Stack AI Builds Competitive Edge, Driving Commercialization Cycle** Baidu Group leverages its strong internet foundation to expand innovative applications and monetization opportunities. Established in 2000 as a search engine, the company has consistently innovated to enhance user experience. Over two decades, its sustained growth and profitability have enabled investments in high-potential products and services. Core businesses (excluding iQiyi) now focus on search, information feeds, online marketing, and AI-driven offerings, supported by three growth engines: Mobile Ecosystem, Intelligent Cloud, and Autonomous Driving.

**Online Marketing: AI Search to Elevate Profitability** China’s internet ad market grows moderately, dominated by e-commerce/video platforms, followed by social/search. Baidu’s leading search engine market share and multi-app ecosystem enable precise user profiling, boosting ad efficiency. Transitioning from CPC to CPS models, Baidu is cautiously testing AI search monetization. While short-term revenue pressure exists, AI search is expected to fuel long-term growth. Projected 2025–2027 online marketing revenue: RMB 62.39 billion, RMB 59.27 billion, and RMB 59.86 billion.

**Intelligent Cloud: Market Leadership Drives Revenue Growth** AI-driven innovation is propelling cloud computing’s next growth phase. Despite late entry, Baidu leads in AI public cloud share, aiming to build "AI-first" cloud infrastructure as a new profit center. By open-sourcing its ERNIE model, Baidu lowers barriers for developers, fostering AI-native applications and scaling cloud services. This strategy reduces computing costs, spurs tech upgrades, and enhances industry-specific solutions. Synergies with Kunlun chips, AI SaaS, and GPU cloud products are expected to accelerate growth. Projected 2025–2027 Intelligent Cloud revenue: RMB 27.33 billion, RMB 32.79 billion, and RMB 38.69 billion.

**Autonomous Driving & Growth Initiatives: Robotaxi Expands Market Potential** Robotaxi, with advantages over traditional taxis, holds significant growth potential. Baidu’s Apollo Go leads commercialization efforts through regional expansion and partnerships. Cost reductions and global expansion are expected to strengthen economies of scale. Additional growth drivers include DuerOS smart assistants. Projected 2025–2027 revenue for this segment: RMB 13.83 billion, RMB 15.91 billion, and RMB 17.50 billion.