Baidu Declares AI The New Core While Trip.com Beats
7 Min. Read Time
Baidu Q4 Earnings Overview
Baidu (BIDU US, 9888 HK) reported after the Hong Kong close today. A cursory glance at the numbers would leave one underwhelmed, though there are numerous positives. Yes, revenue declined year-over-year (YoY) but increased quarter-over-quarter (QoQ). The bottom line came in light, but a foreign exchange loss and higher tax expense weighed on net income.
Founder and CEO Robin Li declared that “2025 marked a pivotal year as AI became the new core of Baidu.” Search is dead, apparently! I wonder what Google thinks about that...
“Revenue from Baidu's Core AI-powered Business exceeded RMB 11 billion in Q4, accounting for 43% of Baidu General Business”. This is comprised of AI Cloud Infrastructure, which saw revenue increase +143% YoY to RMB 5.8 billion for the quarter and +34% YoY to RMB 20 billion for the year. AI applications’ revenue was RMB 2.7 billion for the quarter and RMB 10 billion for the year.
Baidu's robotaxi service Apollo Go reached 300,000 rides a week as rides increased 200% YoY to 3.4 million in Q4, though no revenue figure for the business was given. Meanwhile, AI-native Marketing Services revenue increased +110% YoY to RMB 2.7 billion, driven by the ERNIE Bot large language model (LLM), which had 202 million monthly users and Baidu App’s 679 million monthly users.
The company also reiterated its first dividend payment in 2026, continued its stock buyback, and confirmed that plans to spin off its chipmaker Kunlun are still on.
- Revenue declined to RMB 32.7 billion ($4.68 billion) from RMB 34.1 billion and versus expectations of RMB 32.7 billion
- Adjusted Net Income declined to RMB 3.9 billion ($559 million) from RMB 6.71 billion and versus expectations of RMB 3.46 billion
- Adjusted earnings per share (EPS) declined to RMB 10.62 ($1.52) from RMB 19.18 and versus expectations of RMB 9.40
- Buyback raised to $5 billion, effective through December 31, 2028
Trip.com Q4 Earnings Overview
Trip.com (TCOM US, 9961 HK) reported Q4 financial results that beat analyst expectations. The company stated in their press release, “In January 2026, the Company received a notice of an investigation from the State Administration for Market Regulation (SAMR) that it had commenced an investigation pursuant to the Anti-Monopoly Law of the People's Republic of China. The investigation is ongoing, and the Company is fully cooperating with SAMR.”
Management stuck with the above statement when asked about the investigation by an analyst during the conference call. When asked about AI disruption, management stated that their partnerships, relationships, and proprietary data should shield them from significant disruption or revenue loss.
In the future, the company sees both inbound tourism, which accounts for only 0.5% of China’s GDP, compared with 10% in Thailand and 5-6% in Europe, along with continued outbound, i.e. international, travel to drive growth. Trip.com assisted 20 million inbound tourists in 2025.
- Revenue increased 21% YoY to RMB 15.4 billion ($2.2 billion) from RMB 12.74 billion and versus expectations of RMB 14.88 billion
- Adjusted Net Income increased to RMB 3.5 billion from RMB 3.04 billion, and versus expectations of RMB 3.23 billion
- Adjusted EPS increased to RMB 4.97 ($0.71) from RMB 4.35 and versus expectations of RMB 4.73
- Cash on the balance sheet was RMB 105.8 billion ($15.1 billion)
Key News
Asian stocks were mixed despite a falling US dollar, following Nvidia's results, as South Korea outperformed again driven by SK Hynix and Samsung. Meanwhile, Taiwan was flat as Taiwan Semiconductor Manufacturing (TSMC) was down after hitting a 52-week high yesterday. Hong Kong underperformed the region. I suspect that the rallies in Korea and Taiwan, which have been primarily driven by TSMC, SK Hynix, and Samsung, has been acting like a giant vacuum cleaner sucking money out of markets like Hong Kong and others.
The renminbi (CNY), China's currency, hit another 52-week high value against the US dollar, though it had no effect on foreign investor sentiment toward China overnight. Foreign investors' definition of China is 86% Hong Kong-listed stocks, according to MSCI's definition. In theory, Hong Kong stocks should benefit from a stronger CNY as their businesses, which receive RMB-denominated revenue, are now worth more, in theory.
Hong Kong opened higher but faded on sentiment, weighed down by Nvidia's results, US Trade Representative Greer's statement that China's tariff rates won't change in advance of President Trump's China trip, and Zimbabwe's move to limit lithium exports in a bid to "Make Zimbabwe Great Again" by requiring domestic processing.
Mainland investors sold a healthy net $941 million worth of Hong Kong-listed stocks and ETFs via Southbound Stock Connect. However, this inflow was only 19% of Hong Kong's volume, indicating that foreigners were net sellers.
Not that it mattered in today's market action, but the Ministry of Commerce (MoC) stated that the 6th round of US-China economic and trade talks will take place "in the near future". I assume this is teeing up the big bosses Trump and Xi to annoucne a broader trade deal during Trump's China trip, which is scheduled to begin on March 31st.
The "Dual Sessions" policy meetings kick off next Wednesday, March 4th. Meanwhile, next Thursday, March 5th, will mark the start of the Chinese People's Political Consultative Conference (CPPCC), which will be followed by the National People's Congress (NPC). All of these political events will culminate in the release of the final 15th Five-Year Plan, which will set the government's priorities through 2030.
Hong Kong's heat map resembled Omaha Beach. Internet, insurance, oil & gas, coal, media & entertainment, pharmaceuticals, biotech, etc., were all lower. The Zimbabwe news weighed on battery giant Comtemporary Amperex Technology (CATL), which fell -6.49%. Meanwhile, Hong Kong-listed electric vehicle (EV) stocks, including BYD, which fell -3.85%, were mostly lower overnight. The Mainland-listed solar panel company Sungrow fell -5.48%. Trip.com fell -3.24%, despite the strong results, as the SAMR's ongoing investigation continues to weigh on investor sentiment. Hong Kong Exchanges & Clearing (HKEX) gained +0.78% following strong financial results that were released midday.
Mainland China was mixed overnight, as growth stocks in technology hardware and semiconductors outperformed, while mega and large cap insurance, banks, oil & gas, beverages, and healthcare all underperformed. Semiconductor stocks lifted the STAR Board into positive territory, while mega caps weighed on performance in Shanghai. Shenzhen benefited from technology hardware, closing just above the 2,750 resistance level.
Last Night's Performance
| Country / Index | Ticker | 1-Day Change |
|---|---|---|
| China (Hong Kong) | HSI Index | -1.4% |
| Hang Seng Tech | HSTECH Index | -2.9% |
| Hong Kong Turnover | HKTurn Index | 9.5% |
| Hong Kong Short Sale Turnover | HKSST Index | 5.3% |
| Short Turnover as a % of Hong Kong Turnover | N/A | 16.7% |
| Southbound Stock Connect Net Buy/Sell (US $ Millions) | N/A | -940.73 |
| China (Shanghai) | SHCOMP Index | 0% |
| China (Shenzhen) | SZCOMP Index | 0.3% |
| China (STAR Board) | Star50 Index | 0.9% |
| Mainland Turnover | .chturn Index | 3.1% |
| Japan | NKY Index | 0.3% |
| India | SENSEX Index | 0% |
| Indonesia | JCI Index | -1% |
| Malaysia | FBMKLCI Index | -0.4% |
| Pakistan | KSE100 Index | 3% |
| Philippines | PCOMP Index | 0.1% |
| South Korea | KOSPI Index | 3.7% |
| Taiwan | TWSE Index | 0% |
| Thailand | SET Index | 1.2% |
| Singapore | STI Index | -0.9% |
| Australia | AS51 Index | 0.5% |
| Vietnam | VNINDEX Index | 1% |
| Indicator | Hong Kong | Mainland China |
|---|---|---|
| Today's Volume % of 1-Year Average | 100 | 135 |
| Advancing Stocks | 85 | 2370 |
| Declining Stocks | 411 | 2661 |
| Outperforming Factors | Value | Momentum, EPS Revision, Buybacks |
| Underperforming Factors | Liquidity, Momentum, Growth | Large Cap, Quality, Value |
| Top Sectors | Utilities, Industrials, Consumer Staples | Tech, Utilities, Energy |
| Bottom Sectors | Healthcare, Discretionary, Real Estate | Real Estate, Communication, Staples |
| Top Subsectors | REITs, Conglomerates, Utilities | Power Generation Equipment, Communication Equipment, Internet |
| Bottom Subsectors | Construction Materials, Electrical Equipment, Pharmaceuticals/Biotech | Insurance, Real Estate, Auto |
| Southbound Connect Buys | Tencent | N/A |
| Southbound Connect Sells | Alibaba, CNOOC (Large), SMIC, Xiaomi, YOFC (Moderate), Hua Hong Semiconductor (Small) | N/A |
| MSCI China All Shares Index | # of Stocks | Average 1-Day Change (%) |
|---|---|---|
| Hong Kong Listed | 165 | -2.56 |
| Communication Services | 11 | -2.3 |
| Consumer Discretionary | 28 | -3.22 |
| Consumer Staples | 13 | -1.56 |
| Energy | 6 | -1.67 |
| Financials | 25 | -2.12 |
| Health Care | 16 | -5.59 |
| Industrials | 22 | -1.47 |
| Information Technology | 12 | -1.65 |
| Materials | 14 | -1.95 |
| Real Estate | 7 | -2.87 |
| Utilities | 11 | -0.05 |
| Mainland China Listed | 386 | 0.32 |
| Communication Services | 8 | -1.42 |
| Consumer Discretionary | 26 | -0.85 |
| Consumer Staples | 19 | -0.87 |
| Energy | 12 | 0.68 |
| Financials | 64 | -0.44 |
| Health Care | 31 | -0.71 |
| Industrials | 58 | -0.36 |
| Information Technology | 95 | 2.44 |
| Materials | 52 | 0.3 |
| US & Hong Kong Dually Listed | Ticker | 1-Day Change (%) |
|---|---|---|
| Tencent HK | 700 HK Equity | -2 |
| Alibaba HK | 9988 HK Equity | -3.6 |
| JD.com HK | 9618 HK Equity | -2.6 |
| NetEase HK | 9999 HK Equity | -1.9 |
| Yum China HK | 9987 HK Equity | -1.2 |
| Baozun HK | 9991 HK Equity | 7.3 |
| Baidu HK | 9888 HK Equity | -4.3 |
| Autohome HK | 2518 HK Equity | -1.2 |
| Bilibili HK | 9626 HK Equity | -4.6 |
| Trip.com HK | 9961 HK Equity | -3.2 |
| EDU HK | 9901 HK Equity | -5.1 |
| Xpeng HK | 9868 HK Equity | -5.1 |
| Weibo HK | 9898 HK Equity | -2.4 |
| Li Auto HK | 2015 HK Equity | -4.5 |
| Nio Auto HK | 9866 HK Equity | -0.1 |
| Zhihu HK | 2390 HK Equity | -1.5 |
| KE HK | 2423 HK Equity | -6.2 |
| Tencent Music Entertainment HK | 1698 HK Equity | -3.6 |
| Meituan HK | 3690 HK Equity | -2.7 |
| Hong Kong's Most Heavily Traded by Value | 1-Day Change (%) |
|---|---|
| ALIBABA GROUP HOLDING LTD | -3.6 |
| TENCENT HOLDINGS LTD | -2 |
| HSBC HOLDINGS PLC | 5.5 |
| XIAOMI CORP-CLASS B | -0.4 |
| PING AN INSURANCE GROUP CO-H | 1.9 |
| YANGTZE OPTICAL FIBRE AND-H | 1.6 |
| SEMICONDUCTOR MANUFACTURI-H | 0.6 |
| HONG KONG EXCHANGES & CLEAR | 0.8 |
| MEITUAN-CLASS B | -2.7 |
| KUAISHOU TECHNOLOGY | -4.1 |
| Shanghai and Shenzhen's Most Heavily Traded by Value | 1-Day Change (%) |
|---|---|
| VICTORY GIANT TECHNOLOGY -A | 9.3 |
| CAMBRICON TECHNOLOGIES-A | 8 |
| SUZHOU TFC OPTICAL COMMUNI-A | -2.7 |
| CONTEMPORARY AMPEREX TECHN-A | -4.5 |
| RANGE INTELLIGENT COMPUTI-A | 17.7 |
| ZHONGJI INNOLIGHT CO LTD-A | 2.2 |
| EOPTOLINK TECHNOLOGY INC L-A | 2.7 |
| SUNGROW POWER SUPPLY CO LT-A | -5.5 |
| WUS PRINTED CIRCUIT KUNSHA-A | 10 |
| ADDSINO CO LTD -A | 1.3 |
Last Night's Exchange Rates, Prices, & Yields
- CNY per USD 6.84 versus 6.86 yesterday
- CNY per EUR 8.07 versus 8.09 yesterday
- Yield on 10-Year Government Bond 1.83% versus 1.82% yesterday
- Yield on 10-Year China Development 1.96% versus 1.94% yesterday
- Copper Price +0.24%
- Steel Price +0.29%
