Beijing time, February 18, baidu（ NASDAQ:BIDU ）The company released its unaudited financial report for the fourth quarter of 2020. According to the financial report, in the fourth quarter, baidu achieved revenue of 30.3 billion yuan and net profit (non US GAAP) attributable to Baidu reached 6.9 billion yuan, exceeding market expectations for four consecutive quarters. In 2020, Baidu will achieve revenue of 107.1 billion yuan and net profit (non US GAAP) of 22 billion yuan.
Robin Li, chairman and CEO of Baidu, said: “in 2020, Baidu successfully concluded its performance with strong results, witnessing the resilience and vitality of China’s economy and beneficiaries of the accelerated development of the industrial Internet. In the fourth quarter, Baidu’s core non advertising revenue increased by 52% year-on-year, indicating that Baidu’s commitment to technological innovation has achieved remarkable results. In the new year, Baidu, as a leading AI ecological company, will seize the huge market opportunities in cloud services, intelligent transportation, intelligent driving and other artificial intelligence fields. At the same time, Baidu will give full play to its huge Internet user base and provide more non advertising services. “
Baidu shares rose 3.4% to $317 in after hours trading due to favorable financial data.
In this quarter, AI new business represented by intelligent cloud, intelligent driving and other frontier business has become a new engine driving Baidu’s medium and long-term growth. In particular, we should pay attention to the acceleration of the implementation of Apollo in the frontier business and the acceleration of the commercialization process. 2020 is the eighth year of Baidu’s layout of intelligent driving. Baidu Apollo’s strategy of “climbing Mount Everest and laying eggs along the way” continues to be realized.
Financial reports show that Baidu has made a breakthrough in intelligent driving technology. In terms of test license, after obtaining the first all unmanned driving test license in China, Apollo obtained the all unmanned driving test license in California, becoming the only Chinese company in the industry to obtain such license in China and the United States at the same time. In December, baidu obtained 199 test licenses in China. In addition, according to the “road test report of Beijing autonomous driving vehicles (2020)”, baidu won three consecutive titles in the number of test vehicles and test mileage.
For Apollo, one of the core changes in the fourth quarter was that the capital market began to face up to its value and give it a separate valuation. Take Mizuho, a well-known international investment bank, as an example. In its latest research report, Mizuho raised the valuation of Baidu’s automatic driving business from the original $20 billion to $40 billion. At the same time, Huaxing capital has given Apollo a valuation of US $38 billion in its latest research report, which is also the 14th securities company to give Baidu Apollo a valuation.
It’s not hard to guess the logic behind the investment bank’s valuation of Apollo. The main reason is that Baidu’s automatic driving technology is speeding up its implementation and ushering in the turning point of commercialization. As Oppenheimer said, with the gradual maturity of Apollo technology, it has developed three main profit points, including robotaxi, ADAS and v2x.
The series of progress Apollo made in the fourth quarter undoubtedly confirmed this. First of all, from the perspective of technology and products, at the Apollo ecological conference in December last year, baidu Apollo launched four series of products, namely “intelligent driving, intelligent cabin, intelligent map and Intelligent Cloud”, to help the development of China’s intelligent vehicles through the combination of software and hardware. In addition, baidu also launched the pilot assisted driving solution ANP, which is different from the industry solution that only supports high-speed and urban ring roads. Baidu ANP can also be used on urban roads. In this regard, Huaxing capital said that ANP will be the first profitable product among all automatic driving products of Baidu. It is estimated that by 2025, it will have a revenue of 28 billion yuan.
At the level of commercialization, baidu Apollo also gave a satisfactory answer.
In terms of automatic driving service for passenger cars, Apollo’s open platform for automatic driving is developing vigorously. At present, it has reached strategic cooperation with 10 Chinese and global car companies to empower car manufacturers with intelligent solutions such as high-precision maps and autonomous parking. In addition, ANP pilot assisted driving solution has also begun to be commercialized. In terms of automatic driving service, as of December 2020, Apollo robotaxi and robobus have received more than 210000 passengers.
Baidu Apollo has signed strategic cooperation with Guangzhou, Shanghai and other local governments to jointly build a national pilot area for the Internet of vehicles. At the same time, baidu Apollo also won the bidding for Baoding, Zhuzhou and other intelligent transportation projects. At the same time, Weima W6, which is equipped with Baidu Apollo AVP technology, has also been launched. It will start pre-sale in March and start delivery in April.
It can be seen that with the continuous iteration of Apollo technology, its landing process is also accelerating, and it is becoming one of the important growth points of Baidu’s revenue. It is worth mentioning that Baidu has just announced that it will join the auto industry as a complete vehicle manufacturer, which is undoubtedly another booster for Apollo, which will greatly accelerate the process of Apollo’s commercialization.
Nowadays, electric and intelligent vehicles have become the trend of the times and are opening up a new blue ocean. According to McKinsey Co, China will probably be the world’s largest market for automatic driving in the future. By 2030, total sales of autopilot will reach 230 billion dollars, and the order amount based on automatic driving will reach US $260 billion. As a leader in the field of automatic driving, baidu Apollo can undoubtedly get a share of this huge market.
It can be predicted that with the accelerated implementation of Apollo technology and products, baidu AI’s commercialization prospect will be further opened, becoming a strong growth point of Baidu’s revenue, and making Baidu truly “walk on two legs”. In the wave of the intelligent era, Baidu, which holds many AI “treasures”, will follow.