Event: Baidu released the unaudited fourth quarter performance report of 2021 on March 1, 2022 (Beijing time).
Key points of Baidu Q4 performance: in 21q4, baidu group achieved an operating revenue of 33.1 billion yuan, a year-on-year increase of 9%, and the core business revenue increased by 12% to 26 billion yuan, of which the advertising business revenue was under pressure, a year-on-year increase of 1% to 19.1 billion yuan, which was mainly affected by adverse macro factors such as the multi-point spread of the epidemic and the continuous implementation of advertising industry supervision, The revenue of non advertising business was 6.9 billion yuan, with a year-on-year increase of 63%, reflecting the rapid growth of core innovative businesses such as cloud computing and intelligent driving; 21q4 Baidu group's adjusted non GAAP net profit is 4.1 billion yuan, the operating profit margin of core business is 19%, and the net interest rate is 18%.
Mobile advertising business: the financial report shows that Baidu's monthly life increased by 14% year-on-year in December 2021, reaching 622 million, and the number of daily login users reached 82%. However, questmobile shows that the single day use time of per capita users decreased by 4% year-on-year in December, and questmobile shows that the use time of Baidu apps decreased by 0.3% year-on-year in December 2021; Connectivity has been continuously promoted, the transformation of internal traffic has been strengthened, the integrated ecological construction has been gradually improved, and the diversified product matrix has been continuously expanded. As of December 2021, 84 partners have joined Baidu applet alliance; Baidu's annual revenue from hosting pages increased by 52% and reached 40% of Baidu's core advertising revenue. Hosting pages helped create a low-cost and efficient marketing closed loop and improve the efficiency of traffic acquisition and transformation. Follow up suggestions focus on Baidu's mobile ecological strategic layout in baijiahao, smart applet and hosting page.
Smart cloud: Q4 revenue grew by 65% year-on-year, and the landing of vertical fields such as smart transportation and cities continued to accelerate. We believe that Baidu capital will continue the acceleration trend, which is expected to boost the high growth of cloud computing revenue and maintain the judgment of CAGR 50% in the next five years.
Automatic driving: with the gradual implementation of AVP products and large volume, as well as the cooperation between intelligent driving AVP / ANP and Byd Company Limited(002594) and other large manufacturers, we think it will accelerate the development of the whole intelligent driving industry; In the past two years, the gradual establishment of product cooperation with Weima, great wall, GAC and Byd Company Limited(002594) verified the competitiveness of Apollo intelligent drive from three aspects: product technology, hardware cost and high compatibility in our in-depth report "the next positive cycle: Baidu's next five years from the perspective of business, strategy and capability". It is suggested to pay attention to AVP / ANP iteration, intensive vehicle manufacturing and robotaxi progress.
Investment suggestion: from the perspective of business, strategy and ability, Baidu's transformation in business model, enterprise structure and organizational power and the positive cycle in the next five years, and the accelerated landing of its full scene intelligent layout and the progress rate of commercialization are the verification and result of the transformation. It is suggested to continue to pay attention to the performance contribution of Baidu's non advertising business and estimate that its overall growth rate is better than the industry average. With the continuous deepening of digital economy and the gradual promotion of smart city, intelligent transportation and industrial intelligence, Baidu will continue to benefit. At the same time, it is suggested to pay attention to Baidu's in-depth cooperation and commercialization process between intelligent driving and Byd Company Limited(002594) . We believe that the recognition and cooperation of industry leaders will accelerate the market's recognition of the value of Apollo intelligent driving solutions. In the future, baidu is likely to accelerate the expansion of cooperation with other automobile manufacturers.
Risk tips: 1. Intensified competition in China's cloud market; 2. Internet regulatory risks; 3. Epidemic risk; 4. Macroeconomic slowdown; 5. The promotion of intelligent driving business is not as expected. 6. The performance forecast is the preliminary calculation result. Please refer to the annual report
