Citi Keeps Buy Rating On Baidu, Sees Attractive Valuation

Citi kept its Buy rating on Baidu (09888) and set a US target price of $166, saying the stock's valuation is attractive. The bank said Baidu's GPU cloud business is growing strongly and profitability is improving, while the company is focusing on capital efficiency with a shorter payback period than in the CPU era and lower capital spending than peers, according to ETNet. Citi also cited Baidu's view that the MaaS managed market offers significant opportunities if the Wenxin Yiyan model continues to improve. Baidu sees Robotaxi as a long-term investment, wants to reverse the decline in its search business, and has pledged to deliver shareholder returns and maintain strict capital allocation. Citi expects southbound capital flows to take time to fully develop rather than emerge immediately.