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   Technology StocksBaidu (BIDU)


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From: Frank Sully8/31/2021 11:51:32 AM
   of 2008
 
Jidu: Baidu's Ambition in Auto Industry

Automotive
Author: EqualOcean News, Yiru Qian

JiDU Automotive's first product sludge model completes the wind tunnel experiment, which means the model design schemes have been determined and engineering development and design optimization are under way.



On August 30, Xia Yiping, CEO of Baidu's automobile brand JiDU, released the wind tunnel diagram of the first automobile product on his Weibo.

Founded in March 2021, as a brand of Baidu intelligent automobile, JiDU is expected to maximize the great achievement of Baidu's AI ability in the automobile industry. It is jointly funded by Baidu and Geely, with a registered capital of CNY 2 billion. According to previous reports, they will jointly build a 'next generation' smart car based on Geely's newly developed pure electric architecture - Haohan Sustainable Experience Architecture, or Haohan SEA. At the same time, Baidu artificial intelligence, Apollo automatic driving, Baidu map and other core technologies will fully empower the car.

Less than six months since its establishment, JiDU has made frequent actions and news in the automotive industry. In March, Robin Li revealed that the first model will be launched no later than 2024, and Li held a high expectation for it.

On April 23, Xia Yiping declared that JiDU automobile plans to launch its own automobile brand in the third quarter of 2021, striving to launch its first electric vehicle within three years and will work for accelerating the process. It is expected that by the end of 2022, the core team of JiDU automobile will be expanded to 2500 to 3000 people, with over CNY 50 billion be invested in the production of intelligent vehicles in the next five years,

On June 1, Mr. Xia stated that the operation team building of JiDU automobile is completed, and the design has been basically determined. It is currently in the stage of sludge model and 3D modeling. The first car of JiDU automobile is planned to be unveiled in 2022, pricing over CNY 200,000. Meanwhile, Xia Yiping also said that the first car of JiDU would rely on Geely's supply chain to ensure product quality control instead. In terms of manufacturing, the first car would be developed and manufactured mainly by Geely, and JiDU took the role of defining the product more.

In early July, it was reported that JiDU automobile would be produced with the help of Geely. The factory may be located in Shanghai Fengjing Industrial Park, however, JiDU denied the news officially.

On August 3, Mr. Xia visited CATL with others for power battery business with Zeng Yuqun, chairman of CATL.

JiDU automobile carries Baidu's expectation of accelerating the commercialization of AI by building cars. Prior to this, when Robin Li visited the first model of the oil sludge model, he expressed that the establishment of JiDU in January 2021 has been reegared as carrying Baidu's dream of building cars. We hope to bring the most advanced AI technology to the market in the first place.

According to public information, before and after Baidu launched JiDU Auto, Alibaba, Xiaomi and DiDi successively announced their start of car manufacturing business, and even Skyworth, a home appliance enterprises, also entered the market with a high profile. Some industry observers believe that the current rival has entered the second half, and 'intelligence' may become the focus of competition, that is, to form user stickiness through intelligence. It includes technologies that have a disruptive experience for driving, such as intelligent cockpit, intelligent Internet connection and automatic driving.

However, many auto brands have encountered negative events recently, which has also raised questions about their unskilled application of intelligent technology. But even so, the players' enthusiasm for speed seems to be still high, and the storm doesn't seem to have too much impact on their acceleration of car making.

equalocean.com

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From: Frank Sully8/31/2021 12:40:21 PM
   of 2008
 
All The Key Announcements Made By Chinese Search Giant At ‘Baidu World 2021’

31/08/2021

In March 2021, Baidu raised funds for its artificial intelligence chip unit Kunlun



Last week at the annual technology conference ‘Baidu World 2021’, the Chinese internet giant Baidu unveiled its second-generation AI chip Kunlun (Kunlun II), robocar, a driverless taxi app (Luobo Kuaipao), and more. In addition, the company showcased various advancements in artificial intelligence, electronic devices, and plans for future growth.

CEO of Baidu, Robin Li, believes that the company’s future lies in AI and related areas like autonomous driving and other industrial applications.

Kunlun II

The second-generation AI chip helps devices process large amounts of data and boost computing power multifold. It offers two to three times more processing power than the previous generation, equipped with Baidu’s second-generation XPU architecture. The team said that it had entered mass production, and the chip is used in areas such as autonomous vehicles.

Kunlun II can be applied in multiple applications, including cloud, terminal, and edge, empowering high-performance computer clusters, biocomputing and intelligent transportation, and autonomous driving. It can also be optimised for AI technologies such as voice, NLP, and images. In addition, the new AI chip supports deep learning frameworks such as PaddlePaddle, Baidu’s open-source platform. This diverse range of use cases gives the second generation Kunlun AI chip a powerful edge in powering various AI applications, including internet core algorithms, smart cities, and smart industries.

The first generation Kunlun chip was launched in 2018. In March 2021, the Chinese internet giant raised funds for its artificial intelligence chip unit Kunlun, valuing the business at $2 billion. Baidu also operates another chip unit called Honghu, a far-field voice interactive smart chip for consumer terminals, edge computing, and industrial applications.

Earlier this month, Tesla announced the launch of its in-house chip called Dojo,essential for computer vision for self-driving vehicles using cameras. Recently, Cerebras also unveiled the world’s largest AI chip, which has the computing power of a human brain and handles neural networks with up to 120 trillion parameters.

Open AI platform Baidu Brain 7.0

Besides this, the Chinese internet giant launched the latest version of Baidu’s open AI platform, called ‘Baidu Brain 7.0’, one of the world’s largest AI open platforms. Baidu Brain 7.0 offers greater integration of various knowledge sources and deep learning, including language comprehension and reasoning, using numerous combined technologies to enable output across formats (language, voice and visual).

The company believes that Baidu Brain 7.0 and Kunlun II AI chips will provide an improved hardware foundation for a new generation of AI applications and enhance accessibility and ease of use. Together with PaddlePaddle, the bundled AI platform offers a diverse product system to help developers use AI technology quickly and efficiently. In addition, it helps in simplifying the development and implementation of AI in real-world applications.

According to Baidu, more than 3.6 million developers globally have developed 400,000 AI models via PaddlePaddle, alongside serving over 130K businesses and institutions across industries.

“Baidu Brain, the Kunlun II AI chip, Paddle Paddle, and other software and hardware are a powerful combination delivering transformative AI technologies, which are set to serve us everywhere in the future,” said the Baidu team.

Other Initiatives

In a bid to increase the accessibility of AI, Baidu announced the launch of Songguo Academy. The company said it would be providing educational resources, from long-term courses of study to training seminars and competitions. The tech industry and academia currently back the initiative to build a platform for training a new generation of AI professionals.

In addition to this, Baidu showcased the prototype of its ‘robocar,’ a first of its kind autonomous vehicle. However, it is still unclear if the company would be mass-producing them soon.

Meanwhile, Baidu runs its ‘robotaxi’ services in Guangzhou and Beijing, where customers commute using the Apollo Go app. The company has now rebranded that app to ‘Luobo Kuaipao,’ as it plans to expand its service on a mass scale. In April 2021, the Chinese tech giant said that Apollo intends to cater to 3 million users in China with a fleet of 3K robotaxis in 2023.

In June 2021, the company announced its collaboration with state-owned automaker BAIC Group to build 1,000 driverless cars over the next three years. It eventually looks to commercialise its robotaxi service across China.

Besides this, Baidu also announced brand new hardware devices, including a smart screen (Tian Tian), Xiaodu’s smart widescreen TV V86, noise-cancelling smart earphones, smart dictionary pen, etc.

Wrapping up

Baidu, the second largest search engine platform globally, makes money from advertising, similar to Google. It holds a 70-80 per cent market share in China’s search engine market. But, in 2019, the company witnessed a slump in the domestic market, which led the shares to fall by about 20 per cent last year. Plus, a new contender, Sogou, is expected to close the gap in the near future.

Now, with its latest announcements, Baidu is looking to diversify its business beyond advertising and rising competition in the search engine space.

analyticsindiamag.com

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From: BigMacAttack9/1/2021 1:00:44 PM
1 Recommendation   of 2008
 
Baidu looks to be moving today, nothing wrong with a 6% daily gain on a large cap

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From: Frank Sully9/2/2021 3:23:42 PM
   of 2008
 
Global AI And AI Chips Markets To Grow At CAGR Near 40%

See Message 33470268

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From: Frank Sully9/2/2021 3:55:25 PM
   of 2008
 
Re: Spamming

It has been brought to my attention that I've been technically guilty of breaking SI's anti-spamming rules by posting identical info on AI related subjects on more than two boards when this info seemed relevant to several boards. In the future I will post given info on only two boards, the board which seems most relevant and the AI, Robotics and Automation board, linked below.

Subject 59856

Cheers,
Frank

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From: Frank Sully9/3/2021 2:33:47 PM
   of 2008
 
Baidu Stock Continues to Be a Long-Term Success Story

BIDU stock owners now have better conviction

By Nicolas Chahine, InvestorPlace Contributor

Technically, the problems for Baidu(NASDAQ: BIDU) stock started in May of 2019. It lost footing there and launched a bearish pattern with a potential 60% downside drop. BIDU stock almost filled the entire thing as it tumbled 50% thereafter.



Source: StreetVJ / Shutterstock.com

It stopped just shy of the ideal crash target, and finally bottomed after the 2020 pandemic panic crash. From there the bulls enjoyed a 325% rally. Unfortunately it ended in tears starting February, as BIDU went on to fall 60% from the cusp.

Today we argue that it’s viable to hold BIDU stock long for the long term. While it is not the all clear, it is reasonably safe to wade back into these waters.

I’d like, however, to leave a lot of room for error and doubt. This last correction is not from anything wrong with Baidu. The Chinese authorities are waging war against their large-cap companies there. In their pursuit lies a rubble of excellent stocks in ruins like Alibaba(NYSE: BABA) for example.

They are leveling the playing field, so they are crimping profit potentials for all of them.

BIDU Stock Is Not the Problem

The iShares Trust – iShares China Large-Cap ETF (NYSEARCA: FXI) fell 30% before it also bottomed in late July. This is not the first time this has happened. The FXI also fell 30% twice, once in January of 2018 and again in April 2019. BIDU stock did not seesaw as much, but fell just as violently.

Its recovery from the 2020 bottom was healthy until December – too healthy perhaps. It was a rocket ride to $340 per share and unreasonable. Wall Street did its usual and overshot in both directions, so they priced it out almost as quickly.

For the last two weeks, BIDU has been trying to stabilize. The level at which it’s doing so makes sense, because $140 has been pivotal since 2019. When equities fall into significant breakout necklines, they tend to find support on the way down.

I don’t expect a reversion back to the highs, but the first step is to find footing. At this stage savvy investors could use options to deploy risk and leave room for error. There are no experts on Chinese politics, so we have no idea if they have achieved their goals. There could be more headline shocks to come.

Case in point this week stocks like Roblox (NYSE: RBLX) and Tencent(OCTMKTS: TCEHY) fell apart on headlines about “spiritual opium.” The government wants to limit game screen times for kids. There’s no amount of homework that can help us forecast such pitfalls. Therefore, all bullish positions on Baidu stock must carry the speculative label. This means that investors would do well not to go all in.

Caution Is Key



Source: Charts by TradingView

In such predicaments, instead of buying upside hope I prefer selling downside risk. This way I don’t even need a rally to win. A traditional investor has to risk $157 to buy shares, with no room for error. An options trader can instead collect a premium for selling a BIDU put 20% below current price.

This is also a bullish position, but it could still profit after a full-blown correction. Even then, I would temper my enthusiasm because of the overall macroeconomic conditions.

Last week, Federal Reserve Chair Jerome Powell all but committed to starting tapering this year. This is the first step in ending the QE that started in 2018. There is a possibility that equity prices will miss the biggest tailwinds they’ve had in decades if not ever. The indices at all time highs are could be vulnerable to sharp declines.

There are also geopolitical risks brewing in Europe, especially in Germany. We’ve had politicians all over the world create havoc on Wall Street before. It wouldn’t surprise me if the next crisis in stocks came from them. Regulators have pretty much plugged the potential financial system threats. But I don’t underestimate the political will to destroy in order to accomplish goals.

We don’t know what we don’t know, so there’s always room for surprise shock. The world doesn’t plan on having accidents, yet they do happen. Protecting portfolios is easy by using instruments like the CBOE volatility index ( VIX). Keeping an entire equity portfolio long without that is hazardous at these altitudes.

Why Bother With Baidu?

Don’t get me wrong, the bulls are completely in charge of the price action, but I am cautious nonetheless. BIDU stock is in a viable recovery trade inside this bullish price action. The upside potential could be significant even if it just came back to the July neckline. That would account amount to a 30% recovery off the bottom. There will be sellers lurking there and also at $210 per share.

Since the company fundamentals are solid, it also makes for a good long-term investment. Total revenue is growing at a healthy clip, and net income more than doubled since 2017. Yet owners of the stock are realistic with their expectations. Baidu’s price-earnings-ratio is under 9, and its price-to-sales is only 3.

It will be difficult to disappoint investors who have humble forecasts. Owners of the stock down here are less likely to panic sell it. The simple conclusion is that Baidu’s upside potential outweighs the downside risk.

On the date of publication, Nicolas Chahine did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

investorplace.com

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From: Frank Sully9/6/2021 12:35:26 PM
   of 2008
 
How does Baidu's CEO Robin Li travel to work? Using Baidu's Robotaxi service of course!

Two minute video


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From: Frank Sully9/10/2021 4:57:08 PM
   of 2008
 
Baidu Is Actively Transforming From A Value Company To A Growth Company
Sep. 7, 2021 1:52 AM
Baidu, Inc. (BIDU

Summary
  • Restoring the margin of a large segment of Baidu's business - iQIYI - will increase the total operating margin from 13.4% in 2020 to 17.3% by 2023.
  • News of Apollo's success pushes Baidu's seizure of share in the large market for smart devices, electric vehicles, and urban solutions closer;
  • Disclosure of the value of small innovative businesses that are not included in the market value of the company: Xiaodu and Kunlun.



Yongyuan Dai/iStock Unreleased via Getty Images

Investment thesis

Baidu (NASDAQ: BIDU) is actively transforming from a value company to a growth company. Baidu has several fast growing segments in cloud AI and autonomous driving system. The main business of the company generates stable cash flow to support new high-tech segments - cloud, artificial intelligence, electric vehicles, smart device systems.

We have a positive view of the company's business and believe that now is a good entry point to the company. Baidu is trading at 7.7x EV/EBITDA'22, that is "dirt cheap".

Baidu's business

Baidu is a large Chinese holding company, the main subsidiary of which is the search engine of the same name. Baidu is the dominant search engine in China. According to StatCounter, Baidu is retaining 79.9% of the search engine market share in China, and 1.29% of the search engine market share in the world.





Source: StatCounter

In addition to the search engine, Baidu also owns iQIYI, a Chinese online video and TV streaming platform. Together with Youku and Tencent ( OTCPK:TCEHY), it accounts for 80% of the total video streaming market in China. Baidu owns a 56% stake in iQIYI. Moreover, iQIYI is listed on the exchange (NASDAQ: IQ). Baidu is consolidating IQ's financial results in its financial statements.

In addition to classic advertising businesses, Baidu is actively developing in the fast-growing segments:
  • Baidu Cloud. Baidu Cloud has a diverse lineup of solutions. They include EasyDL (a machine learning service), PaddlePaddle (a deep learning service that, according to GitHub, is among the top 3 of the best ones), the provision of cloud and process automation services, and Baidu Brain (a smart assistant with artificial intelligence). According to China Internet Watch, Baidu Cloud holds 7.2% of the cloud market share in China in Q1 2021.
  • Apollo is a cloud-based autonomous driving system. Apollo has traveled 6.4 million miles on road autonomously, and 600 million miles in test simulations. Apollo has also received a permit for night driving under special weather conditions in the capital of China - Beijing - and two other major cities.Jidu is a joint venture between Baidu and Geely ( OTCPK:GELYF) to develop smart electric vehicles. The company has been established only recently. The first models are planned for release in 2023.
  • Baidu Core: SearchThe Baidu search engine is the company's main asset. Search generates both most of the company's revenue and most of the company's operating profit.

In 2016, Baidu had 79.1% of the search engine market share in China, and every year until 2021, the company was losing market share. By the end of 2020, Baidu's share was only 69%.

The search engine Sogou (NYSE: SOGO) is to blame for that. In 2013, Sohu (the creator of Sogou) entered into a partnership with Tencent. Sogou has integrated a classic search engine with WeChat (the most popular social network in China with over 1.1 billion users) and QQ (a social platform for games, music, shopping, microblogging; it is the second most popular website in China and the fifth most popular in the world). Tencent was able to develop Sogou due to its technology. It also attracts advertisers due to the better user personalization. Sogou knows not only what the user is looking for on the web, but also what they are watching/playing/listening to on QQ and what they are talking about on WeChat.

Everything changed in Q1 2021. Sogou earned 47% less than Q1 2020. Tencent said it wanted the company to be private (Sogou is now listed on the exchange). The announcement sparked uncertainty among Sogou's major clients regarding the new business policy. Additional customer churn was caused by the announcement that Sogou will spend less on driving traffic to its search engine. Because of this, Sogou's share in search fell from 20% to 11% and customers started using Baidu.



Source: Company Data, StatCounter

Baidu Search Prospects

Search advertising is one of the market segments of digital advertising. eMarketer predicts that China's digital ad market will grow by an average of 15% over the next three years. At the same time, the search advertising market will grow at a rate two times slower than the digital advertising market. This is because the advertising market is moving to social media and social websites. Social activities talk about a person, their interests, and values much more than ordinary surfing on the Internet. Most advertisers are looking for these personalized solutions to help them reach out to their customers. Search will remain a major part of the advertising segment, as it allows to tell a large number of people something, but niche services are moving to social media networks. As a result, the share of search from the digital advertising market will decline from year to year.



Source: eMarketer

We expect that the decline in Sogou's share in the search engine segment for China will be short-term, as it is associated with emotional factors. Sogou has an important advantage over Baidu - it has the access to a detailed portrait of each user, thanks to the integration with WeChat and QQ. We expect Baidu's share of search to shrink by 2% to 77.9% by the end of 2021. And then every year until 2023, it will decrease by another 4% and will reach 70% by the end of 2023:



Source: Invest Heroes' estimates

Baidu Core: Cloud technologies

Baidu has successfully entered the cloud technology race in China. Overall, the cloud market in China is dominated by 4 major players. Alibaba has the largest share:



Source: Statista

Baidu is developing cloud in several directions:

EasyDL is a simple machine learning service. It was named the best in China by IDC twice;PaddlePaddle is a deep learning platform, among the top 3 in the world in terms of the number of uses on GitHub;AI Baidu is a cloud platform (PaaS) using artificial intelligence. Baidu platform is different from Alibaba Cloud. Alibaba provides the infrastructure (IaaS) on which the decisions of the companies are superimposed, that is, the foundation. Baidu, on the other hand, provides a platform within which there are ready-made solutions: the foundation plus the frame of the house. For example, one of the largest banks in China has fully automated customer interactions and lending using the Baidu platform. The largest TV channel in China, CCTV, has automated the creation of video clips and video tagging in live broadcast mode. More advanced cloud technologies are called SaaS platforms which consist of the foundation plus the frame of the house plus all the stuff of the house. It means they are ready-made solutions that are implemented without any integration with internal data sources.Cloud ProspectsBaidu Cloud has grown at an average of 50% YoY over the past two years. This is not surprising. Baidu entered a fast-growing market with new technologies and monetized its large customer base. For the forecast period, we conservatively forecast the growth of Baidu’s Cloud segment at the level of the growth of the Chinese cloud market.

According to various analytical agencies, the cloud technology sector will grow by 18% YoY globally. However, the Chinese cloud market is growing significantly faster. The current share of the Chinese market is only 7%, and analysts predict a global share of China at 10.5% by 2023. This corresponds to a growth rate of more than 30% YoY through 2023.



Source: Invest Heroes' estimates

Baidu Core: other businesses

The rest of Baidu Core's businesses include:

Xiaodu is the world's best manufacturer of smart displays, speakers, and tablets, according to IDC;Kunlun is a semiconductor manufacturer for cloud infrastructure. According to Baidu, Kunlun received its first round of investments with a total valuation of $2 billion.Apollo and Jidu, which were discussed above.

Xiaodu and Kunlun operate in China's fast-growing markets. ReportLinker expects the global smart display market to reach $15.1 billion. The market is growing at an annual rate of 22% YoY.

Research and Markets estimates the smart speaker market will reach $17.8 billion by 2027. The fastest-growing country will remain China, where annual market growth is estimated at 26% until 2027.

We estimate the growth of the Hardware segment excluding Apollo and Jidu at 32% YoY through 2023:



Source: Invest Heroes' estimates

Baidu Core: Apollo

Apollo works in three main areas:

Smart cars. Apollo provides access to CarLife+, a system that collects a wealth of vehicle data and turns the vehicle into an Internet of Things object. With CarLife+, the driver can find out everything about the condition of any part at any time. It also includes the DuerOS system, which is a smart onboard computer with voice recognition. Other offerings include smart cards and a smart parking system.Smart transport. Apollo partners with city services and provides them with various solutions to road problems. Apollo now has two solutions: smart traffic lights, according to the company, accelerate traffic by 20-30% during peak hours; and V2X, a roadside object recognition system.Autonomous driving. Apollo develops both a private autopilot for electric cars and a system of robotic taxis and minibuses. Apollo has hit over 6.2 million miles on the road. Apollo has also received dozens of permits for testing fully autonomous driving in major cities, including Beijing. Moreover, the minibus system already covers 30 cities, in which more than 89 thousand passengers are transported.Apollo has a very high potential, with only the robotaxi market in China estimated at $224 billion, and Apollo providing the most technologically advanced and comprehensive solution on the market.

First of all, when analyzing Apollo's results, we start from Baidu's predictions, which follow the earlier outlined plan. After all, China is a planned economy, and there, guidance speaks volumes. Furthermore, given that Apollo has received permission in Beijing, the state actively supports Apollo.

According to the GS Research data, the CarLife+ system is used by about 10 million users at an average price of 20 yuan per year. DuerOS is used by about 1 million users at an average price of 250 yuan per year. The smart parking system is used by about 100,000 people at an average price of 10,000 yuan per year, and the smart card system is used by about 280,000 people at an average price of 500 yuan per year.

We assess the potential of each sub-segment according to the company's forecasts and the growth rate of the autonomous driving market in China:



Source: Invest Heroes' forecast, Company Data



Source: Invest Heroes' forecast, Company Data

Based on the average prices and installations, we predict a smart car segment revenue of 6.6 billion yuan by 2025. Average market growth is estimated at 26% annually.

Baidu expects the smart transportation system to cover 100 cities by 2023. Each new contract is estimated at an average of 100 million yuan per year, and the renewals of already signed contracts are estimated at 40 million yuan per year.



Source: Baidu's guidance, Invest Heroes' estimates

Baidu predicts that the number of robotic taxis will reach 3,000 by 2023, and more than 12,000 by 2025. At the same time, Baidu does not create a new player in the taxi market, but enters into collaborations with local players, for example, DiDi (NYSE: DIDI). This means that taxis and Baidu will share the trip revenue among themselves in a certain proportion, for example, 50/50. Taking into account 12,000 robotic taxis in 2025, the average number of trips per day is 12, robotaxis will make 52.5 million trips. Adjusted to inflation, the average price of a trip in China will reach 32 yuan, bringing the operator's total earnings to 1.7 billion yuan. With an equal division of income, Apollo will receive 870 million yuan.

As a result, we estimate Apollo's total revenue in 2025 at 18.6 billion yuan:



Source: Baidu's guidance, Invest Heroes' estimates

Baidu Core: Jidu

Jidu Auto is a joint venture between Baidu (55%) and Geely (45%). According to the executive director of Jidu, the first electric car will go into production in 2023.

Jidu will release its first electric vehicle which will look like a robot and will target the younger generation. Also, the company is not going to use dealer services for the sales of electric vehicles.

The Jidu vehicles will use Geely's open-source platform and are being built at Geely's factories. Baidu will most likely take over all the technological equipping of the electric car. In addition to technology, Jidu is considering using Baidu's semiconductors.

We believe that Jidu will enter the market in 2023, as they are the first to create a robotic car. In addition, by that time, Apollo and other Baidu technologies will have time to establish themselves not only for the Chinese audience but also for the international audience, thanks to the Winter Olympic Games in Beijing in 2022.

We expect that in 2023, the company will be able to produce 60 thousand cars and increase production to 240 thousand by 2025. Taking into account the average selling price of an electric car of 150 thousand yuan or 23 thousand dollars, Jidu will earn 48 billion yuan in revenue in 2025:



iQIYIiQIYI is one of the largest streaming platforms in China. iQIYI specializes in streaming long videos and TV shows. iQIYI is the largest streaming platform in China with over 500 million monthly users. Now, the number of paying users reaches 105.3 million (-11% YoY).

The customer churn occurs because iQIYI is cutting back on content investments and raising subscription prices. That is since Baidu is trying to cut its losses. Despite its leading position in the industry, iQIYI continues to be unprofitable.

iQIYI will begin to lose market share as the video streaming sector in China is growing 22% YoY. However, video streaming is growing mainly due to short video services like TikTok. At the same time, long videos and series are less popular.

We expect stagnation in the number of monthly active users and slower growth in advertising revenue due to maintaining a stable customer share. Now iQIYI holdsabout 30% of the video content market and 40% of the video content market for children.

In this regard, we expect that IQ will earn 30.8 billion yuan in revenue in 2021, as we do not expect a significant decrease in regular users of the platform. At the same time, given that the platform does not seek to reduce the turnover of premium content, we expect an EBITDA loss in 2021 of 3.3 billion yuan. But we still expect iQIYI to be able to reach the operating income in 2023:



Source: Invest Heroes' estimates

Q2 Results. Baidu Accelerates AI Deployment

Today, Baidu is heavily focused on deploying its AI systems more quickly, so it is raising R&D spending and capital expenditures.

Baidu Cloud is growing twice as fast as the Chinese cloud market. In the last quarter, the growth was over 65% YoY. Baidu has been named the Top 1 AI Cloud Infrastructure Provider in China by IDC. In Q2 2021, Baidu signed two additional major contracts. Geely, a major automaker in China, will digitize its business with Baidu's solutions. Baidu will move Geely's business to cloud infrastructure, streamlining manufacturing, and management processes. Geely will provide cloud solutions for its suppliers and customers. Baidu has also deployed an intelligent water treatment plant monitoring system in a Chinese city with 8 million people. A machine learning model for predicting water use and adjusting water pressure has reduced electricity demand by 8%.

Apollo is also growing rapidly. In Q2 2021, Baidu introduced the Apollo Moon, the fifth generation of Apollo Robotaxi, with a 60% reduction in mileage. The 4th generation Apollo has traveled 12 million kilometers on road and has received 278 permits. Apollo continues to develop its smart city systems. ACE Smart Transportation has signed agreements with 20 cities. ACE re-signed agreements with 9 cities to test the next generation of ACE. Robotaxi Apollo Go expanded its operations in Guangzhou with 47 thousand trips (+200% YoY). Apollo Go is rated 4.9 out of 5 by users. Great Wall Motors, the largest pickup truck manufacturer in China, will supply Apollo's automatic parking system to its flagship WEY-Mocha SUV. Furthermore, the operating system for cars, DuerOS, has been installed on 1.8 million cars (+265% YoY).

Other growth initiatives are also showing good results. Xiaodu remains the best supplier of smart displays in the world and smart speakers in China. Xiaodu is actively used by the elderly people in China, of which there are already 300 million people. Xiaodu smart displays connect seniors as a community and serve as a virtual companion in conversational AI, improving their quality of life and allowing family members to monitor the health and safety of their loved ones remotely. Xiaodu recently closed a new round of investments valued at $5.1 billion. In November 2020, the company was valued at $2.9 billion.

Baidu's growth costs moneyIn addition to continuing to invest in content to maintain consistent subscriber levels amid rising subscription prices, iQIYI is also stepping up investment in development to support the rapid growth of Cloud and Apollo. As a result, prospects for Baidu are growing, but, the business margins are falling. Let us remind you that we do not expect Baidu to retain the current search engine market share. Earlier this year, Baidu gained 10% in search engine market share only by changing the terms for advertisers of another search client, Sogou. Tencent decided to make the search engine private and implemented new terms, which caused the share to fall from 20% to 10%, and, the revenue fell by 50%. We expect Baidu's search engine market share to recover to 70% by 2023.

As a result of Baidu's increased investment and the slower recovery in iQIYI's margin, we expect Baidu to generate EBITDA of 22.7 billion yuan in 2021 and 28 billion yuan in 2022.



Source: Invest Heroes' estimates

Conclusion

Baidu is actively transforming from a value company to a growth company. The main business of the company generates stable cash flow to support new high-tech segments - cloud, artificial intelligence, electric vehicles, smart device systems.

We have a positive view of the company's business and believe that now is a good entry point to the company. Baidu has several drivers for growth:

Baidu's overall margin growth is driven by iQIYI's margin recovery. iQIYI's margins have grown for 5 consecutive quarters since the price hike on subscriptions. At the same time, business growth is slowing down. iQIYI is following the path of Netflix, investing in premium content, which retains the existing customers - about 105 million people - despite the rise in prices.News of Apollo's success. The more contracts and approvals Apollo gets, the closer the huge market for smart devices, electric cars, and cities will be to Baidu.Further disclosure of the value of innovative segments.We value the company at a target EV / EBITDA multiple of 11.9x, which was calculated based on historical multiples excluding investment cash flows and EBITDA growth. Accordingly, we estimate the fair value of Baidu shares over the next 12 months at $233/ADS. BUY.

Risks

The main risk for a large Chinese company is a regulatory one. It is not known if any of Baidu's businesses will come under additional regulatory oversight from the Chinese authorities. If the intervention of the authorities happens, then it can significantly change the landscape of the industry and its prospects.

The second risk is the ability of IQ management to successfully continue to restore the company's margins and bring it to profit. IQ marginality stagnation will continue to hurt Baidu's core business and slow the growth of other initiatives.

The third major risk is the timely launch of Jidu's EV production and Baidu's ability to provide a competitive edge over other major EV makers. If Apollo systems fail, Baidu could will lose market share in the promising electric car market.

Authors: Aleksandr Sayganov, Dmitriy Novichkov

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© 2021 Seeking Alpha


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From: Frank Sully9/12/2021 8:09:13 PM
   of 2008
 
TCL to Spend Over 20 Billion Yuan on Semiconductor Development, Will Carry Out R&D with Other Tech Giants Including Meituan and Baidu

Categories: INDUSTRY Pandaily

Posted on September 10, 2021



(Source: TCL)

On Thursday, Chinese electronics firm TCL indicated that over the next five years it will invest more than 20 billion yuan ($3.1 billion) in the fields of smart terminals, semiconductor display and materials, semiconductor photovoltaics and semiconductor materials. It will also develop new applications in commercial displays and smart home appliances alongside Meituan, Alibaba, Baidu, ByteDance and other domestic tech giants.

At the same time, the Guangdong-based company plans to establish joint laboratories with Xiaomi, Longli, Lenovo and HiSilicon, and will carry out joint development with Galaxycore and SVG.

TCL was founded in 1982. Its main business is the import and export of semiconductors, electronic products and communication equipment, new optoelectronic and liquid crystal display devices. At the TCL Global Ecological Partner Conference on Thursday, TCL released a global ecological cooperation development strategy, or the “Rising Sun Plan.” In the future, by participating in the formulation of industry standards, opening up technology and data platforms, strategic business cooperation, joint R&D, industrial investment and more, TCL will build an industrial ecology with global partners.

Li Dongsheng, Founder and Chairman of TCL, said: “We will build the world’s leading intelligent IoT ecosystem. In 2025, the revenue from smart terminal business will reach 250 billion yuan, the proportion of overseas revenue will reach 60%, and the proportion of innovative business will reach 30%.”

Du Juan, CEO of TCL Industrial, said, “In the next five years, TCL Industrial will spend 400 billion yuan on device purchasement and invest 30 billion yuan in research and development.”

pandaily.com

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From: Frank Sully9/13/2021 12:37:50 PM
   of 2008
 
Baidu Opens Robotaxi Service in Shanghai with Apollo Go Ride-Hailing Platform

PRESS RELEASE PR Newswire

Sep. 13, 2021, 05:31 AM

BEIJING, Sep. 13, 2021/PRNewswire/ -- Today, Baidu announced that it will begin public testing of Apollo Go in Shanghai, marking the fifth city where passengers have the ability to trial the robotaxi mobile platform. Baidu is the only company to offer this service in the three first-tier cities of Beijing, Guangzhou and Shanghai.

The Shanghai operation will include 150 stations opened in phases throughout the city to provide users convenient access to residential areas, commercial areas, offices and public transportation. Passengers can use the service from 9:30 a.m. to 11:00 p.m. every day of the week.



This announcement comes on the heels of another milestone for Baidu Apollo – the expansion of Apollo Go to Tongzhou District in Beijing, where the service will enable residents and visitors of the suburb to experience travel in an autonomous vehicle. The first batch of routes in Tongzhou will cover a total of 22 stations– with a total distance over 31 miles, allowing for more than 100 trips every day.

According to a recent IHS Markit report, the major market potential for autonomous vehicles in the future will be pinned on business models such as robotaxis, which are estimated to account for more than 60 percent of China's future mobility sharing market by 2030, exceeding $201 billion. IHS also estimates that this portion of the market will be dominated by two to three robotaxi service providers, with the leading provider occupying more than 40 percent of the market share.

The autonomous driving industry in China has recently entered a new stage of development, characterized by trialing the implementation of large-scale applications. Wei Dong, vice president and chief safety operation officer of Baidu's Intelligent Driving Group, said that achieving this large-scale implementation requires three steps: regionalization, commercialization and verification via unmanned on-road operation. Baidu has already made headway in autonomous ride-hailing, achieving a 60% drop in cost per mile with the 5th generation robotaxi vehicle release in June. With the launch in Shanghai, Baidu Apollo is continuing to deliver on China's vision of developing a world-leading autonomous driving market.

As of the end of August 2021, Apollo L4 autonomous driving accumulated 8.7 million test miles. Following the launch in Shanghai, Baidu plans to bring Apollo Go services to 25 more cities in the next three years, making autonomous driving a reality for 3 million people in China.

About Baidu

Founded in 2000, Baidu's mission is to make the complicated world simpler through technology. Baidu is a leading AI company with strong Internet foundation. Baidu is traded on the NASDAQ Global Select Market under the symbol "BIDU", and on the main board of the Hong Kong Stock Exchange under the stock code "9888". Currently, one ADS represents eight Class A ordinary shares.

markets.businessinsider.com

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