After the Hong Kong stock market closed on February 22, Baidu, the purest AI concept stock on the Hong Kong Stock Exchange, released its performance report for the fourth quarter and the whole year of 2022. In the fourth quarter when the new crown epidemic hit the macro economy, Baidu’s operating profit and operating profit margin Both achieved year-on-year growth.

Relying on the long-term investment in the field of AI, Baidu’s various data are constantly showing a new attitude despite the epidemic and many challenges brought about by the external environment. This new attitude also means that Baidu’s second growth curve is on the way. Broaden and expand.

1. Stable and positive, net profit increased by 10% year-on-year

In terms of revenue: In this quarter, Baidu achieved a total revenue of 33.077 billion yuan, which was 33.088 billion yuan in the same period last year, basically the same year-on-year, and a slight increase of 1.65% from the previous quarter. The annual revenue in 2022 will be 123.675 billion, a slight decrease of 1% year-on-year. The annual revenue in 2022 is 123.675 billion yuan, and I personally feel that it is mainly affected by the interference of the epidemic.

In terms of profit: In this quarter, Baidu realized an operating profit of 4.593 billion yuan, compared with 1.958 billion yuan in the same period last year, a year-on-year increase of 135%. In the fourth quarter, the net profit attributable to Baidu (non-GAAP) 53. 7.1 billion yuan, a year-on-year increase of 32%. In fiscal year 2022, Baidu Core’s performance for four consecutive quarters exceeded market expectations.

However, after the global explosion of chatGPT, whether Baidu, which has been betting on AI for many years, can catch the train of chatGPT, it can only be said that hope is ahead.

In this financial report analysis, Brother Ergou explained and analyzed Baidu’s business according to the different natures. The division of Baidu’s business system is simple and rough. One is Baidu’s core business, mainly advertising marketing, innovative business (artificial intelligence, autonomous driving, etc.), The other is the iQiyi business. To put it simply, except for iQiyi’s business, it can be called Baidu’s core business in Baidu’s mission system.

2. Innovative business, AI or Baidu’s killer feature

The rest of the core business excluding the advertising business is classified as an innovative business, which not only includes Xiaodu, which is a smart hardware business, smart cloud, which is a cloud business, and Carrot Run, which focuses on autonomous driving. These seemingly irrelevant innovative businesses actually have a common feature, that is, they are all new growth curves that expand outward with the core of artificial intelligence. Although these innovative businesses account for a relatively small proportion of the current revenue contribution, they are Future growth space may be the key to Baidu becoming the first echelon of the Internet again.

2.1 Xiaodu speakers, ranked first for 5 consecutive quarters

According to data from IDC, Strategy Analytics and Canalys, in the first three quarters of 2022, Xiaodu Audio ranked first in the shipment of smart screens and smart speakers in China. It has formed a monopoly in the screen and smart speaker market.

Through the popularization of smart hardware, if the upcoming Wenxin Yiyan is combined with Xiaodu, then Xiaodu’s core competitiveness will continue to expand.

2.2 AI cloud – the largest artificial intelligence cloud service

In Q4 of 2022, AI cloud revenue increased by 4% year-on-year, mainly due to the impact of the epidemic. The low-margin business in the solution and the result of the constant standardization of existing AI solutions.

According to the report on China’s public cloud market for the first half of 2022 released by IDC, Baidu Smart Cloud has ranked first in the AI cloud service market for four consecutive years. As of the end of 2022, the Baidu Feijiang platform has gathered more than 5.35 million developers, served more than 200,000 enterprises and institutions, and created more than 670,000 models based on Feijiang.

The biggest advantage of Baidu Smart Cloud is its years of accumulation in AI technology, empowering cloud services through AI, and providing standardized solutions for the industry. In terms of many cloud services, Brother Ergou is more optimistic about Baidu’s cloud business. The main reasons are as follows:

(1) Baidu Cloud’s service targets are more biased towards traditional manufacturing and government-enterprise-related industries. This is the general direction of cloud development in the future. Tencent Cloud’s business is more biased towards the nature of the game industry and entertainment industry, while Alibaba Cloud’s service targets are For e-commerce and Internet finance.

(2) Wenxin Yiyan empowers Baidu Smart Cloud, bringing new development opportunities for the cloud service industry.

2.3 Apollo – the star of tomorrow

In recent years, Baidu has invested the most in R&D in the fields of smart cars, autonomous driving, and smart transportation. This is also the most imaginative direction for Baidu in the future, and it is also an important foothold to support Baidu’s second growth curve.

(1) Carrot Run: During this quarter, Carrot Run has provided more than 561,000 unmanned travel service orders, a year-on-year increase of 162% and a quarter-on-quarter increase of 18%. More than 2 million orders have been provided for driverless travel services. Just on December 30, 2022, Carrot Kuaipao was among the first to be approved to carry out fully unmanned autonomous driving tests in Beijing, making Baidu a step closer to providing fully unmanned car-hailing services on public roads in the capital. As the operation scale of Carrot Run continues to expand, and it continues to learn and optimize in different application scenarios, only through large-scale data drill technology iterations can Carrot Run go further and further.

(2) ACE Intelligent Transportation: In urban intelligent transportation scenarios, Baidu ACE intelligent transportation solutions (mainly including intelligent network connection, intelligent traffic management, intelligent expressway, and intelligent parking) have been implemented in cities such as Beijing, Guangzhou, Chongqing, and Changsha. And achieved remarkable results, greatly improving the efficiency of urban traffic operations. As of the end of 2022, based on a contract value of more than 10 million, Baidu’s ACE intelligent transportation has landed in 69 cities, compared with 35 in the same period last year, a year-on-year increase of 97.14%.

3. A word from the heart, empowering the future

With the global popularity of chatGPT, Baidu’s product – Wenxinyiyan has also surfaced, and is expected to be launched in March 2023. Baidu is currently one of the few artificial intelligence companies in the world that has a full-stack layout. From the high-end chip Kunlun core, to the deep learning framework of the flying paddle, to the Wenxin pre-training large model, all levels have key self-developed technologies leading the industry .

Although Wenxin Yiyan is not currently online, it can be concluded that Wenxin Yiyan will be the leading artificial intelligence model in terms of Chinese language models. A better understanding of the culture will make it more suitable for the Chinese market.

According to Baidu’s financial report letter, in the future, Wenxinyiyan will be fully integrated into all Baidu’s operating products, including Baidu search, AI cloud, Apollo automatic driving, Xiaodu smart devices, etc., and the Wenxinyiyan large model will be opened to support More companies are involved in building their own models and applications. Perhaps Wenxinyiyan is Baidu’s entry point into the next-generation Internet. Whether it can benefit from it depends on the performance of its products in March.

According to the disclosure of the Baidu Create conference, the Wenxin large model has been developed to the third generation, with a maximum of 260 billion parameters, and can uniformly understand text, pictures, videos, structured information, etc., and is capable of language understanding and language generation at the same time. The overall effect is at the forefront of Internet companies.

Baidu Q4: Bright sword AI, reshape the golden body

Zhongtai Securities believes that Baidu has all the technologies related to ChatGPT, and has a full-stack layout in AI artificial intelligence, including the underlying chip, deep learning framework, large model (文心一言) and the top-level search application. It is expected that Baidu will present a tripartite form of “chat robot + search tool + text creation”, in the generation of text and pictures, content extraction, combined with its knowledge graph, to form some summaries.

The gust of ChatGPT is just right. Baidu has been dormant in the AI ​​field for a long time, and it is time to shine the sword.