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Baidu Inc BIDU

Rating as of

Morningstar’s Analysis

Valuation
Currency in USD
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1-Star Price

PREMIUM

5-Star Price

PREMIUM

Economic Moat

PREMIUM

Capital Allocation

PREMIUM

Baidu’s Fair Value Estimate Down 3% to HKD 207; Shares Undervalued

Chelsey Tam Senior Equity Analyst

Analyst Note

| Chelsey Tam |

We trimmed wide-moat Baidu’s fair value estimate by 3% to HKD 207 (USD 214) as faster top-line growth in nonadvertising, or nonad, businesses is offset by the lower margin of the businesses. We think shares remain undervalued with Baidu core trading at a 2021 price/earnings of 20 times with its industry-leading artificial intelligence businesses such as smart transportation, autonomous driving and DuerOS potentially providing great business value in the long run.

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Company Profile

Business Description

Baidu is the largest Internet search engine in China with a 75% share of the search engine market in March 2021 as per Statcounter. The firm generated 68% of revenue from online marketing services and the rest from other segments in 2020. Baidu is a technology-driven company and has been investing in AI technology, such as autonomously driven cars.

Contact
No. 10 Shangdi 10th Street, Baidu Campus, Haidian District
Beijing, 100085, Cayman Islands
T +86 1059928888
Sector Communication Services
Industry Internet Content & Information
Most Recent Earnings Mar 31, 2021
Fiscal Year End Dec 31, 2021
Stock Type
Employees 41,000

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