The Latest: Leading search engine Baidu Inc.’s (9888.HK, BIDU.US) revenue rose 6% year-on-year to 35 billion yuan ($4.92 billion) in the fourth quarter, while its net profit fell 48% to nearly 2.6 billion yuan, according to its latest results released on Wednesday.
Looking Up: The company’s adjusted net profit, which typically excludes items like employee stock compensation, increased by 44% to 7.76 billion yuan in the quarter, and was up nearly 40% to 28.75 billion yuan for the full year.
Take Note: The company repurchased $318 million worth of its shares in the fourth quarter, bringing its total repurchases last year to $669 million.
Digging Deeper: Baidu is China’s leading search engine, but is trying to find its next big growth area in the fiercely competitive artificial intelligence (AI) field. Its heavy investment has made it a leader in China’s AI industry, and its large language model (LLM) Ernie Bot, sometimes likened to ChatGPT, was used by more than 50 million people daily in the fourth quarter, up 190% from the previous quarter. Chairman Robin Li emphasized the company has made major breakthroughs in the Ernie Bot model, and said its related revenue will increase by billions of yuan this year.
Market Reaction: Baidu’s Hong Kong-listed shares fell on Thursday morning, and were down 7% at HK$ 99.05 at the midday trading break. The stock now trades near the bottom of its 52-week range.
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