EB Securities: Maintains "Buy" rating on BIDU-SW (09888) Cloud computing, intelligent driving, and self-developed chips open up valuation space.

EB SECURITIES released a research report stating that considering the recovery in advertising demand, both LuobokuaiPao and Kunlunxin are expected to contribute more to performance than previously anticipated. The company raised its revenue forecast for BIDU-SW (09888) for 2025-2027 to 130.8/139.9/148.3 billion yuan (compared to the previous forecast of +1.3%/+2.9%/+3.0%) and raised the company's Non-GAAP net profit forecast for 2025-2027 to 18.2/20.5/23.0 billion yuan (compared to the previous forecast of +1.5%/+3.3%/+3.3%), corresponding to a PE of 18x/16x/14x at the current price, maintaining a "buy" rating. The report stated that on September 15, 2025, Baidu signed a strategic cooperation framework agreement with CMB, focusing on cutting-edge AI technologies such as large models and cloud computing, and conducting cooperation in industries such as science and technology, transportation and logistics, integrated finance, and real estate parks. From September 5 to September 17, the stock price of Baidu in Hong Kong rose by 35.1%, and its Kunlunxin, Robotaxi, DIGIHUMAN and other AI commercialization and ecological values were gradually reassessed by the market. The firm pointed out that Baidu's net cash flow remains at a healthy level to support long-term strategic investment in AI. LuobokuaiPao in Wuhan has achieved breakeven, validating its business model, with accelerated growth in order numbers and smooth expansion overseas; Kunlun Chip shipments exceeded expectations, with in-house large models + computing platforms + self-developed chips forming a synergy between hardware and software, improving the cost-effectiveness of training and reasoning, jointly building barriers in the AI ecosystem. The firm continues to be optimistic about the AI ecosystem value of Baidu, with cloud computing, intelligent driving, and self-developed chips opening up valuation space.