| Valuation method | Value, CHF | Upside, % |
|---|---|---|
| Artificial intelligence (AI) | n/a | n/a |
| Intrinsic value (DCF) | n/a | |
| Graham-Dodd Method | 102.80 | -9 |
| Graham Formula | 107.10 | -6 |
Baidu, Inc. (BIDU.SW) is a leading Chinese technology company specializing in internet search, artificial intelligence (AI), cloud computing, and autonomous driving. Headquartered in Beijing, Baidu operates through its Baidu Core and iQIYI segments, offering a diverse portfolio of services including Baidu App, Baidu Search, Baidu Maps, DuerOS (AI-powered smart assistant), and Haokan (short video platform). The company dominates China's search engine market, holding a significant share comparable to Google's dominance in Western markets. Baidu has strategically expanded into AI-driven solutions, cloud services, and autonomous vehicles, positioning itself as a key player in China's digital transformation. Its partnership with Zhejiang Geely Holding Group underscores its commitment to advancing smart mobility. With a market capitalization exceeding CNY 30 billion, Baidu remains a critical player in China's tech ecosystem, competing with global giants while navigating regulatory challenges unique to the Chinese market.
Baidu presents a compelling investment case as China's leading search engine and AI innovator, with diversified revenue streams from online marketing, cloud services, and autonomous driving. The company's strong cash position (CNY 25.2 billion) and solid operating cash flow (CNY 36.6 billion) provide financial stability, though its high total debt (CNY 84.6 billion) warrants caution. Baidu's beta of 0.517 suggests lower volatility compared to the broader market, appealing to risk-averse investors. However, regulatory risks in China's tech sector and intense competition from Alibaba and Tencent could pressure margins. The lack of dividends may deter income-focused investors, but growth-oriented investors may find value in Baidu's AI and autonomous driving initiatives, which position it for long-term growth in China's digital economy.
Baidu's competitive advantage lies in its dominance of China's search engine market, where it holds an estimated 70%+ market share, akin to Google's position globally. Its AI investments, particularly in DuerOS and autonomous driving (Apollo platform), differentiate it from pure-play internet companies. Baidu's integration of search, AI, and cloud services creates a sticky ecosystem, though it faces stiff competition from Alibaba's cloud dominance and Tencent's social media stronghold. The company's early-mover advantage in autonomous driving in China is notable, but rivals like Huawei and emerging EV players pose threats. Baidu's reliance on advertising revenue (a segment under regulatory scrutiny in China) is a vulnerability, though its diversification into cloud and AI mitigates this risk. Its partnership with Geely in smart EVs could be a game-changer, but execution risks remain high in this capital-intensive sector.