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<Research>HTSC Raises BIDU-SW's TP to HKD236 as AI Reshaping LT Narrative, Values Kunlun Chip Biz at HKD40.1/ Shr
Recommend 13 Positive 26 Negative 12 |
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Huatai Securities has released a report on September 14 highlighting that AI is reshaping the long-term narrative of BIDU-SW (09888.HK). As one of the few internet companies in China that integrates self-developed chip capabilities, AI infrastructure services, and AI application scenarios (advertising, autonomous driving, productivity tools, and more), BIDU-SW holds several business assets that are significantly undervalued, such as its autonomous driving unit, self-developed Kunlun chip business, and Baidu Drive, all of which feature AI functions or attributes. Huatai Securities gave the company a Buy rating and sharply raised its target price to HKD236 from HKD88. Specifically, the broker valued BIDU-SW's Kunlun chip business at HKD40.1 per share based on a forecasted 25x P/S ratio this year and the company's 59% equity stake, representing a mild premium over the average of 22.9x of the comparable companies, namely Nvidia, AMD, Intel, Broadcom, Cambricon, SMIC, and Qualcomm, firms engaged in the chip business. In Huatai Securities' opinion, the Kunlun chip's recent success in winning an order worth over RMB1 billion demonstrates its capabilities to some extent. On the back of self-developed chip technology, Baidu AI Cloud's full-stack capabilities are expected to be further strengthened, with which it will be able to provide customers with stable and efficient services, while capturing demand opportunities arising from the domestic substitution trend in China's market. AAStocks Financial News |
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