“Baidu still holds an upper hand when it comes to attracting advertisements compared with the smaller players”, Marie Sun, a Shenzhen-based analyst at Morningstar Investment Service, said.
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The Beijing-based company’s sales rose 33% to 18.7 billion yuan ($2.9 billion) in the December quarter from a year earlier.
Aside from a search engine, the company also own a product called Baidu Travel, an online travel reference platform that features information, photos and videos of destinations.
“For Baidu shareholders, the sale of the fast-growing but money-losing iQiyi business could increase 2016 earnings per share by 20 per cent”, HSBC analyst Tsang Chi said in a report. Baidu’s management has projected a revenue for the current quarter in the range of 15.41-15.97 billion yuan.
In the fourth quarter of 2015, Baidu raked in 18.699 billion yuan in revenue, up 33.1 percent year on year, with income from mobile services accounting for 56 percent of total revenue.
The clock is ticking, however, for Baidu, similar in many ways to Google with search as its bread and butter, to turn its new tech investments into meaningful business.
Baidu said profit jumped over sevenfold to 24.7 billion yuan as the company achieved a one-off gain from its exchange of shares in its online travel booking unit Qunar with Ctrip in October. On Wednesday, ValueWalk carried a detailed note on whether Baidu’s strong Q4 earnings would boost its share price. “We will continue to benefit from rising demand for services thanks to China’s continuous consumption upgrading”, said Robin Li, board chair and CEO of Baidu.
Tourism Minister Arief Yahya said around 1.1 million Chinese tourists visited the country past year, a markedly low number given that research company GfK’s latest report said that China accounted for 109 million outbound tourists in 2015, with retail spend of US$229 billion. Baidu’s chairman and chief executive recently offered to buy Baidu’s entire stake in Qiyi for USD2.8bn. Spending on businesses like delivery, online deals and video services pulled operating margins down 30.8 percentage points. The deal also ties the two companies closely to Baidu. Baidu is exploring a sub-field of artificial intelligence known as deep learning, which aims to improve search results by training computers to work more like the human brain, and is researching autonomous driving.
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“We are very pleased to deliver a strong set of results in the fourth quarter”.
