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Mizuho Securities analyst James Lee provided company commentary on Baidu, Inc. (NASDAQ:BIDU) following their recently hosted investor call with the company’s management.
Key takeaways are:
(1) Reopening has been orderly with most people being back in the office and large-scale restrictions no longer occurring, and advertising is recovering faster than Cloud.
(2) Growth of the advertising industry is expected to be stable and rational under the current regulatory environment. Beyond this year, the analysts expect a 6.2% CAGR in 2023 and 2024, consistent with their expectations of GDP+ growth.
(3) Cloud positioned to gain share, with significant opportunities from traditional industries.
(4) For Advanced Driver Assistance Systems (ADAS), the analysts believe OEMs represent the largest opportunity near-term and Baidu has significant leadership in testing miles, unit cost, and connected infrastructure to build its 10 billion+ RMB pipeline.
The analysts maintained their buy rating and $285 price target on the company’s shares.
