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Baidu reports solid profits, expects first EV within 3 years

Written by Song Jingli Published on 

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The takeover of YY Live has been “substantially completed.”

Chinese search engine and autonomous driving company Baidu reported RMB 107 billion (USD 16.4 billion) in total revenues for the pandemic-hit 2020, flat from a year earlier, and generated RMB 22.5 billion (USD 3.44 billion) in net income, up 992% year-on-year (YoY). The net income under non-GAAP terms reached RMB 22 billion (USD 3.38 billion), up 21% YoY.

In the fourth quarter, the company’s core business, which includes autonomous driving and the smart speaker division, took in RMB 23.1 billion in revenue. It was 8% more than in the previous quarter and marked the highest growth rate for that quarter in corporate history. Non-marketing revenue reached RMB 4.2 billion, growing 52% YoY in the fourth quarter, thanks to its push into the AI businesses, including cloud services and autonomous car technology.

Baidu’s video affiliate iQiyi reported RMB 7.5 billion (USD 1.1 billion) in total revenue for the quarter, down 1% YoY, resulting in a RMB 1.5 billion (USD 237.2 million) net loss. Baidu carried forward the acquisition of the China livestreaming business YY Live of JOYY, despite a report from short seller Muddy Waters, which said that 90% of traffic on the platform was faked.

Founder and CEO Robin Li confirmed during the earnings call on Thursday morning that the deal has been substantially completed and that Baidu will start integrating YY Live, exploring knowledge-centric and e-commerce livestreaming.

Baidu expects its first quarter revenue of this year to reach between RMB 26 billion (USD 4 billion) and RMB 28.5 billion (USD 4.4 billion), representing a growth rate between 15% and 26% YoY, excluding potential contributions from YY Live. UBS analyst Jerry Liu mentioned in the earnings call that this guidance is above his expectation.

Li further told analysts that he expects the first electric car that Baidu is building with Geely in about three years, which is, according to him, the time needed to launch a vehicle. He added that the company is open to corporations with other automotive OEMs.

Li predicted that the first EV will have the best autonomous driving and infotainment capabilities in the market when it is rolled out. He didn’t want to share a price range on the call.

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