Author | 黄青春
Title Map | Vision China
Beijing time November 7 (November 6, US Eastern Time), Baidu (Nasdaq: BIDU) announced the third quarter financial report for 2019.
Financial report shows that Baidu’s third-quarter fiscal year third-quarter net profit attributable to ordinary shareholders was -6.373 billion yuan, down 151.41% year-on-year; and under non-GAAP, net profit was 4.4 billion yuan.
Operating income decreased slightly from 28.2 billion yuan to 28.08 billion yuan (down 0.44% year-on-year), which was basically the same as that of the same period last year. Earlier, 17 analysts on Wall Street expected an average of 27.49 billion yuan, so slightly more than expected, its share price rose 5% in after-hours trading.
There is such a huge difference between before and after the adjustment of net profit, mainly because of the difference in statistical caliber. Under US accounting standards, Baidu’s profits include equity incentive expenses that are not related to the company’s daily operations, fair value losses of derivative liabilities, and losses of changes in fair value of investments and equity investments.
Before, Ctrip has issued a statement that Baidu sells one-third of its shares. This is the biggest change in equity investment that Baidu generated in the third quarter, and the overall market value of Ctrip is fluctuating or the main reason for Baidu’s investment income is damaged.
US market analysis, Baidu Q3 quarterly profit and revenue exceeded analysts’ expectations mainly due to the steady growth of video streaming platform iQiyi, iQiyi’s revenue increased by nearly 7% to 7.4 billion yuan (about 1.06 billion US dollarsYuan), in September this year, the number of users of iQiyi exceeded 105.8 million. This has formed a relatively large competitive advantage with Alibaba’s Youku.
Although Baidu’s third-quarter revenue slightly exceeded expectations, online marketing revenue was 20.4 billion yuan ($2.86 billion), down 9% year-on-year, reflecting the potential weakness of Baidu’s core online marketing services.
By the international situation is grim, advertising regulation is getting stricter, and Baidu has been under constant pressure to innovate under pressure from competitors such as Bytes, Tencent and Alibaba. Of course, Baidu has made up for the decline of its core business by expanding its product portfolio and focusing on mobile ecosystems and artificial intelligence technologies.
The good news is that Baidu App’s active users increased by 25% year-on-year to 189 million in September. Continued expansion of market share has promoted the improvement of the company’s overall profit margin. It can be seen that Baidu’s search business still has strong market revenue and combat effectiveness.
On the other hand, the small and strong growth momentum has not diminished, with more than 4.2 billion interactions in September, more than 4.5 times the same period last year.
As an important entry point in the era of smart home and Internet of Things, smart speakers have become the new track for major Internet giants to compete. Although new players continue to enter the market, Baidu, Ali, and Xiaomi have already occupied the mainstream of the domestic market.
According to research by leading market research companies such as Canalys, Strategy Analytics and IDC, the shipment of small-sized smart speakers ranked first in the Chinese market in the second quarter. According to IDC data, the small series of home products ranked first in the global market for screened smart speakers. There is no doubt that the small degree has already taken the lead on this track.
However, the Internet industry has entered an adjustment period, how to find new growth points in the external market, and how to improve quality and efficiency within the company has become a problem for all companies to think about.
Before this, Baidu must first face a problem: continuous commercialization, how to maintain its own advantages in the competition with the giants.
In August, Baidu Yunzhi Summit was held to launch a new enterprise AI solution that leverages vision, voice processing and other AI technologies to make cloud services more efficient and easy to operate. At Yunzhi Summit, Baidu Smart Cloud demonstrated numerous enterprise solutions, including accelerating the quality inspection of high-tech component production lines, automatically processing and marking video, working with a local bank, and enhancing customers through “digital” employees on the app. service.
The ecological impact of Baidu’s AI open platform is growing, with more than 1.5 million developers. according toBaidu Intelligent Cloud’s AI open platform allows developers to fully utilize Baidu’s AI technology, including speech recognition, computer vision, natural language processing, and Baidu’s open source deep learning platform. As of September, Baidu Maps Intelligent Voice Assistant has accumulated more than 280 million users, more than double the same period last year.
In September, the first batch of 45 self-driving taxi teams in the country opened trial operation in Changsha. Recently, he obtained 15 autopilot road test licenses in Wuhan and 30 manned test licenses in Luzhou, Hebei. The total number of Baidu autopilot road test licenses reached 150, accounting for more than half of all approved autopilot road test licenses in China.
Li Yanhong, founder, chairman and CEO of Baidu, said, “We are excited about the results of the initial commercialization of the intelligent transportation sector.”
However, Baidu’s large investment in content, smart home, and AI technology has also caused investors to worry about their profitability. Since the beginning of this year, Baidu’s share price has fallen by 32%. In the last few minutes of trading on Wednesday, the stock reached $107.36 and fell 44% in the past 12 months.
In view of this, Baidu Chief Financial Officer Yu Zhengxi said: “Despite the uncertainties of the macroeconomic environment and industry-related policy changes, we are more cautious in terms of cost control and focus on the return on investment. Baidu App The search and information flow margins have been greatly improved, which has improved the overall profitability of the company.”
All this also shows that Baidu is gradually becoming an ordinary Internet company from a huge giant, no longer struggling with the star aura, but this expectation may be more in line with the expectations of the capital market.