In the third quarter of 2021, Baidu's total revenue was 31.921 billion yuan, an increase of 13.07% year-on-year, and the net loss attributable to the mother further expanded to 16.559 billion yuan compared with the second quarter
Lu Gong, a researcher at Investment Times
A few days ago, Baidu autonomous driving has spread new news.
In December 2021, Beiqi Blue Valley said on the interactive platform that the Robotaxi model developed by the company in cooperation with Baidu Group Co., Ltd. (hereinafter referred to as Baidu, 09888.HK) has completed the preliminary technical development and official mass production.
It is reported that in June of the same year, Baidu Apollo and BAIC Jihu jointly released an L4-level mass-produced shared unmanned vehicle product Apollo Moon, and Baidu also disclosed the manufacturing cost of the vehicle for the first time, which was 480,000 yuan per unit, far lower than the average cost of the industry's L4-level autonomous driving models. In this regard, some industry insiders believe that the lower cost is conducive to the large-scale commercialization of shared unmanned vehicles in the future.
However, researchers at the Investment Times noted that Baidu, which is frequently reported in the field of unmanned vehicles, has also reported layoffs before.
At the end of 2021, Baidu Mobile Ecology Business Group (MEG) was exposed to large-scale layoffs, of which more than 300 people in the game department were almost all laid off, and the live broadcast business was laid off by 90%, even if the financial vertical live broadcast with good commercialization ability, some people were laid off. Education and other businesses also have a certain proportion of layoffs, and it is not excluded that MEG's other businesses may continue to lay off employees. It is reported that the Baidu Mobile Ecosystem Business Group (MEG) includes Baidu App, Intelligent Mini Program, Baijia Number, Baidu Live Broadcast, Baidu Health, Baidu Network Disk, Knowledge Vertical Service and Good Looking Video and other services.
According to another source, Cao Xiaodong, vice president of Baidu, head of the mobile ecological user growth department, and head of the interactive entertainment platform, will leave the company. Regarding the layoffs, baidu officials have not yet responded specifically.
"Investment Times" researchers noted that behind the exposed news of layoffs, Baidu's unsatisfactory third-quarter performance. According to the data, in the third quarter of 2021, Baidu's revenue continued to grow, but the net loss in the same period was nearly 16.6 billion yuan, plus the amount of loss in the second quarter, the company has lost more than 17 billion yuan in only two quarters. For the main reason for the loss, some insiders believe that it may be related to the investment business.
Q3 lost nearly 16.6 billion
According to the data, in the third quarter of 2021, Baidu's total revenue was 31.921 billion yuan, an increase of 13.07% year-on-year. In the third quarter, the core camp recorded 24.661 billion yuan, an increase of 15.35% year-on-year. Among them, online marketing revenue was 19.5 billion yuan, an increase of 6% year-on-year, while non-online marketing revenue increased by 76% year-on-year to 5.2 billion yuan, mainly driven by cloud and other AI-driven businesses.
In the case of the company's revenue and core income growth rate of both exceeding 10%, the performance of the same period is reflected to the profit side but not ideal. According to the data disclosure, Baidu's net loss in the third quarter of 2021 reached 16.559 billion yuan, the largest single-quarter loss since listing, compared with a profit of 13.678 billion yuan in the same period of the previous year; the net profit attributable to the core business (non-GAA) was 5.855 billion yuan, a decrease of 21.79% over the same period of the previous year.
It is worth noting that in the second quarter of 2021, Baidu has already incurred a loss, with a quota of 583 million yuan. This is also Baidu's second loss in a single quarter after a gap of two years, and the scale of loss has further expanded.
It is reported that in the fourth quarter of fiscal 2020 and the annual performance report, Baidu co-founder and CEO Robin Li once said, "Entering 2021, Baidu is positioned as a leading artificial intelligence company with a strong Internet foundation." In the latest financial report (third quarter report of 2021), Baidu said that the rich AI product portfolio including cloud services, intelligent transportation, intelligent devices, intelligent driving, intelligent electric vehicles and autonomous driving services will lay a solid foundation for the company's long-term growth.
However, specifically from the perspective of Baidu's revenue structure, online marketing services still constitute about 60% of the company's revenue source.
Driven by the growth of cloud services and other AI-driven businesses, Baidu's core non-online marketing revenue has increased from 2.9 billion yuan in the third quarter of 2020 to 5.2 billion yuan in the third quarter of 2021, and in just one year, the year-on-year growth rate of this part of revenue has also increased from 14% to 76%.
The rapidly developing AI innovation business still contributes less than 20 percentage points to Baidu's total revenue in the current period. According to the data disclosure, by the third quarter of 2021, this part of the revenue accounted for 16.30% of Baidu's total revenue in the current quarter, and there is still a long way to go before it grows into the pillar of Baidu's revenue source and becomes the real engine of Baidu's revenue.
Baidu reported revenue and net profit attributable to the mother in the third quarter
Source: Company earnings
Investment business dragging down performance?
"Investment Times" researchers noted that after the first loss after listing in the first quarter of 2019, Baidu fell into a loss again in the second quarter of 2021, and the scale of loss in the third quarter of the same year expanded significantly. In the second quarterly report, Baidu has explained that the loss is mainly related to the adjustment of the long-term investment in Kuaishou according to the market price. In this regard, some industry insiders believe that the large loss of Baidu may be related to the unsatisfactory "report card" handed over by the company's investment business.
Baidu's investment in Kuaishou dates back to the beginning of 2016. According to the data, in March 2016, Kuaishou announced that it had obtained tens of millions of dollars in C-round investment, and Baidu appeared among many investors. In November 2020, Kuaishou submitted a prospectus showing that Baidu's shareholding ratio was 3.78%. In February 2021, Kuaishou was successfully listed on the Hong Kong Stock Exchange, with an opening price of HK$338 per share on the same day, a sharp increase of 193.91% from the issue price of HK$115 per share, and the company's market value exceeded HK$1.2 trillion at the close of the day.
After entering 2021, the fair value gain of Baidu's long-term investment in the first quarter was 23.7 billion yuan, mainly including the investment income of Kuaishou. By the second and third quarters of the same year, the fair value of Baidu's long-term investments had turned into a loss, with losses of 3.1 billion yuan and 18.9 billion yuan respectively.
"Investment Times" researchers further reviewed the information and noted that since reaching the highest price of HK$417.80 / share on February 16, 2021, Kuaishou's stock price has generally shown a downward trend, and after entering the second quarter of the same year, it has fallen sharply, on May 25, Kuaishou's stock price closed at HK$205.60 / share, which was already cut from the previous high point; on July 26, Kuaishou's stock price fell below the issue price of HK$115 / share, closed at HK$114 / share, and then fell further. As of the close of trading on January 10, 2022, Kuaishou's share price was only HK$77.9 per share, while the company's market value in the same period was about HK$330 billion, and the trillion Hong Kong dollars had evaporated from the highest point.
At the same time, the scale of Kuaishou's loss is also further expanding, with an adjusted net loss of 4.82 billion yuan in the third quarter of 2021, an increase of 401.4% over the loss of 960 million yuan in the same period of the previous year, and the gross profit margin also fell from 43.1% in the same period of 2020 to 41.5%.
In addition to Kuaishou, other companies invested in by Baidu also have an impact. For example, iQiyi, which has been in a long-term loss situation, had a net loss attributable to the mother of 1.73 billion yuan in the third quarter, which was more than 30% larger than the net loss attributable to the mother of 1.175 billion yuan in the same period of the previous year. At the same time, the company's stock price has also fallen sharply, falling nearly 74% since the beginning of 2021.