Search giant Baidu’s shares rally after surprise revenue bump

A Baidu sign is seen during the fourth World Internet Conference in Wuzhen, Zhejiang province, China, December 4, 2017. (REUTERS)
Updated 21 August 2019

Search giant Baidu’s shares rally after surprise revenue bump

  • Baidu CEO Robin Li warned employees in an internal letter on Tuesday that “severe external challenges and a weak macro environment” necessitated changes to the company’s personnel and business strategy

BEIJING: Chinese Internet search giant Baidu Inc. beat quarterly earnings estimates on Monday after signing more people up to its video streaming service, sending its shares higher in a relief rally.
Baidu reported a small 1 percent bump in revenue and a 62 percent drop in net profit for the second quarter, but the result was welcomed by investors who had feared worse amid a slowing Chinese economy and stiff competition from rivals like ByteDance’s TikTok.
Baidu’s earnings update followed reports from Alibaba and last week, which also beat expectations, showing how some tech giants’ diversification strategies might be helping stave off macroeconomic pressures.
Baidu’s video streaming service iQiyi was a key driver of the revenue bump as it crossed the 100 million subscriber mark in June, although there were some concerns about rising costs at the unit associated with winning and retaining viewers.
Baidu’s total revenue for the three months to the end of June rose to 26.33 billion yuan ($3.7 billion) from 25.97 billion yuan a year earlier, beating a forecast 25.77 billion yuan, according to IBES data from Refinitiv. The online giant earned 10.11 yuan per American depositary share, compared with expectations of 6.12 yuan per ADS.
“It makes sense that Baidu beats the estimates because analysts have lowered their expectations to the minimum,” said Connie Gu, an analyst at BOCOM International, adding the market would need to see better-than-expected results for several consecutive quarters for more sustained confidence.
Baidu’s Nasdaq-listed shares rose over 9 percent in after-hours trading. The stock has plummeted more than 50 percent over the past year.
But there were some red flags at separately listed Netflix-like iQiyi, where shares tumbled by the same magnitude after a 20 percent jump in costs as the company spent more on content to entice subscribers undercut a 15 percent rise in revenue to 7.11 billion yuan.
Baidu, whose search engine dominates the market in China, has been under pressure as factors such as US-China trade tensions and tougher government regulation weighed on key revenue contributors like advertising.


• Analysts say Baidu still faces structural challenges.

• CEO tells staff firm is making changes, prepare for pain.

• Baidu still facing fierce competition in online ad business.

Analysts said Baidu faced a longer-term structural problem, especially with the rise of new media platforms seeking to lure away subscribers.
“Competition from recently rising large-traffic platforms is becoming more and more fierce, with advertisers shifting budget to those platforms,” said Natalie Wu, an analyst at China International Capital Corporation.
While Baidu has been expanding into other business lines such as cloud services and mini-programs within its Baidu App, most of its success so far has been at iQiyi. Revenues at its core search-engine business dipped 2 percent during the quarter, while Baidu’s net income more than halved to 2.4 billion yuan.
Baidu CEO Robin Li warned employees in an internal letter on Tuesday that “severe external challenges and a weak macro environment” necessitated changes to the company’s personnel and business strategy.
“These changes will bring pain in phases, but will also bring positive and far-reaching effects, which will allow Baidu to walk on more steadily and for longer,” Baidu’s chief said in the letter seen by Reuters.
The company said that no job cuts were planned when questioned about the personnel restructure.

UAE and Kenya finalize terms of Comprehensive Economic Partnership Agreement

Updated 23 February 2024

UAE and Kenya finalize terms of Comprehensive Economic Partnership Agreement

RIYADH: The UAE and Kenya have concluded negotiations on a trade deal that will boost investment flows in logistics, healthcare, and travel and tourism between the two countries. 

The Comprehensive Economic Partnership Agreement will enhance market access for businesses on both sides, according to a press release.

Investments in the infrastructure and ICT sectors are also set to benefit, and the deal will also see a platform for small and medium enterprise cooperation and expansion on both sides.

Kenya's economy experienced real annual GDP growth of 5 percent in 2023, up from 4.8 percent in the previous 12 months. 

Its services sector, which accounts for 53.6 percent of Kenya’s economy, and agriculture sector, comprising around a quarter of national GDP, offer vast potential for UAE businesses looking to expand into the region, the release added.

The UAE’s Minister of Foreign Trade Thani bin Ahmed Al-Zeyoudi described the new agreement as marking a “significant milestone” in the country’s trade deal program.

He added: “It is a testament to our commitment to strengthening economic ties with the African continent and to creating new opportunities for businesses and investors in both of our countries. 

“The UAE-Kenya CEPA will not only boost trade and investment, but also foster innovation and sustainable growth in key sectors such as agriculture, technology and tourism. 

“We look forward to deepening our relationship with Kenya and to further expanding our presence in Africa as a trusted partner and investor.”

Kenya’s Cabinet Secretary for Investments, Trade and Industry Rebecca Miano said the agreement was testament to her government’s drive to use international commerce as “a key lever of economic growth and transformation.”

She added: “The Comprehensive Economic Partnership Agreement with the United Arab Emirates will play a key role in these efforts, enabling our exports to reach important markets in Asia and the Middle East, and also in stimulating the investment inflows that will further develop our national capabilities. We look forward to its implementation and the mutual benefits it will deliver.”

In 2023, the UAE’s non-oil trade in goods reached an all-time high of $710 billion, a 12.6 percent increase on 2022 – and 34.7 percent more than 2021. 

The UAE has already concluded 10 CEPAs, including with India, Israel, and Indonesia, as well as Türkiye, Georgia, and South Korea.

Oil Updates – crude falls after US Fed governor says no rush to cut interest rates

Updated 23 February 2024

Oil Updates – crude falls after US Fed governor says no rush to cut interest rates

SINGAPORE: Oil prices fell on Friday after a US Federal Reserve official said interest rate cuts should be delayed at least two more months, but indications of healthy demand and concerns over supplies could boost prices in the coming days, according to Reuters.

Brent crude futures were down 38 cents, or 0.5 percent, at $83.29 a barrel at 8:24 a.m. Saudi time, while US West Texas Intermediate crude futures were 40 cents, or 0.5 percent, lower at $78.21.

US Fed policymakers should delay interest rate cuts by at least another couple of months to see if a recent uptick in inflation signals stalling progress toward price stability or is just a bump in the road, Fed Gov. Christopher Waller said on Thursday.

Higher interest rates for longer slow economic growth, which could curb oil demand in the world’s largest oil consumer. But some analysts say demand has remained largely healthy, including in the US.

Analysts at ANZ research said US crude oil inventories rose at a less-than-expected rate last week, while run rates at refineries ended a streak of declines and may increase in coming weeks.

JPMorgan’s high frequency demand indicators are showing oil demand rising 1.7 million barrels per day month-over-month through Feb. 21, its analysts said in a note on Friday.

“This compares to 1.6 mbd increase observed during the prior week, likely benefitting from increased travel demand in China and Europe,” the analysts said.

Oil benchmarks pared some of their Thursday gains after Waller’s comments.

The US central bank has held its policy rate steady in the 5.25 percent-5.5 percent range since last July, and minutes of its policy meeting last month show most central bankers were worried about moving too quickly to ease policy.

Waller also pushed back on the idea that the Fed risks sending the economy into recession if it waits too long to cut rates, saying the Fed can afford to “wait a little longer.”

Oil futures had settled higher on Thursday as hostilities continued in the Red Sea, with Houthis stepping up attacks near Yemen to show support for Palestinians in the Gaza war.

Israel Prime Minister Benjamin Netanyahu’s war cabinet has approved sending negotiators to truce talks taking place in Paris on Friday as pressure mounts in the Middle East, according to a source briefed on the matter and Israeli media. 

AI can bridge North-South divides, Accenture CEO tells FII summit

Updated 23 February 2024

AI can bridge North-South divides, Accenture CEO tells FII summit

  • Julie Sweet: ‘One of the things that’s been great to see is Saudi Arabia taking the lead in many places’
  • ‘It’s really important to always stay focused on what are the opportunities with AI to solve the world’s problems’

MIAMI: Artificial intelligence has the potential to bridge North-South divides, Accenture’s CEO told the Future Investment Initiative Priority summit in Miami on Thursday.

Julie Sweet explored the far-reaching impact of AI on addressing global challenges in a panel discussion titled “FII Priority Compass: What matters most to citizens?”

She said: “The question is how much AI can actually help the Global South and the countries that need help through precision farming, through telemedicine and better healthcare.”

Highlighting Saudi Arabia’s proactive stance in leveraging AI for societal advancement, Sweet stressed the importance of global collaboration in harnessing AI’s potential to tackle complex issues.

“One of the things that’s been great to see is Saudi Arabia taking the lead in many places to think through how can AI help and how can they be a leader.

“So I think it’s really important to always stay focused on what are the opportunities with AI to solve the world’s problems.”

However, Sweet acknowledged that the definitive solution to utilizing AI to close existing divides is not currently available.

Highlighting the vital efforts of organizations such as the UN, she emphasized the urgency of understanding how technology can be harnessed to avoid widening disparities.

Since the increased accessibility of AI in the public market and its “democratization,” experts have emphasized the need to regulate the technology.

“Regulation needs to be the outcome of a very strong public-private partnership, because most governments in the world don’t have the access or the talent inside to know it,” Sweet said, adding that there have been a few successful examples of governments balancing innovation and safety.

“That’s one of the most important things that governments need to do, particularly because the technology is changing rapidly. And I think the good news is that everyone has agreed that some regulation is needed.”

Regarding AI-related risks in the upcoming US election, Sweet cautioned against relying solely on government regulation. Instead, she advocated for increased collaboration among private entities.

“That’s as important as government regulation,” she said. “It’s responsible companies coming together in an agile fashion to solve the risks.”

Addressing concerns about job displacement due to AI, Sweet said while her role as a lawyer would persist, the nature of the job would evolve. She emphasized the need to reskill workforces and prepare the new generation to use AI.

Sweet highlighted Accenture’s annual investment of $1.1 billion in staff training, and stressed the importance of adapting school curricula to future-proof the younger generation through enhanced communication skills and basic technology education.

“All of us will have to continue to adapt and learn … because our skills have to constantly be improved and there’s so much change,” she concluded.

Oman opens its market to Brazilian live cattle

Updated 23 February 2024

Oman opens its market to Brazilian live cattle

  • Announcement made following meeting of officials from both countries in Muscat
  • Both sides emphasized interest in expanding governmental cooperation, commercial partnerships

SAO PAULO: The Brazilian livestock sector is now authorized to export live cattle for slaughter and fattening to Oman.

The announcement was made after a meeting between Roberto Perosa, Brazil’s secretary for trade and international relations, and Ahmed Nasir Al-Bakri, undersecretary at Oman’s Agriculture Ministry. There were other members of the Omani government at the meeting.

“This new market adds to the other 14 opened this year, totaling 93 since the beginning of last year, during President Lula’s third term,” Perosa said.

“At the request of (Agriculture) Minister Carlos Favaro, we continue our mission in the Middle East, visiting countries aiming to expand Brazilian agricultural trade, opening new markets, obtaining approvals for plants through the pre-listing system (eliminating the need for local audits), and negotiating the import of nitrogen fertilizers.”

The Brazilian delegation visiting Oman also includes Julio Ramos, deputy secretary for trade and international relations, and Marcel Moreira, director of trade promotion and investments.

These new markets are the result of joint work by Brazil’s ministries of agriculture and livestock, and foreign affairs.

Representatives of both countries’ agriculture ministries emphasized their interest in expanding governmental cooperation and commercial partnerships.

They identified synergies between Oman’s Vision 2040 plan, which includes food security, and the Brazilian program to convert degraded pastures into agricultural areas.

They also discussed the possibility of partnerships in areas such as fertilizers, sugar, grains for animal feed, live animals, chicken meat and fish.

The Brazilian delegation also met with Ibtisam Ahmed Said Al-Farooji, undersecretary for investment promotion at Oman’s Ministry of Commerce, Industry and Investment.

She presented an Omani program that aims to increase investments in her country and abroad, focusing on food security and Oman’s interest in becoming a hub for the Gulf region.

Al-Farooji also underlined Oman’s neutrality and stability, adding that Brazil could be a great partner.

During the meeting, Perosa emphasized the good relations and complementarity between the two countries, saying Brazil could contribute even more to Oman’s food security and encourage Brazilian companies to process their products in Oman, as is the case with chicken and beef.

He added that the program to convert degraded pastures into agricultural areas represents a great opportunity to strengthen this partnership, including the possibility of acquiring nitrogen fertilizers from Oman.

The Omani side welcomed the idea and said that along with the Oman Investment Authority and Nitaj, the government arm for promoting food security, it will help build the partnership strategy between the two countries.

Transformation of Saudi economy creates opportunities, Public Investment Fund official tells investors

Updated 23 February 2024

Transformation of Saudi economy creates opportunities, Public Investment Fund official tells investors

  • Jerry Todd tells Future Investment Initiative Priority forum in Miami that structural economic changes in the Kingdom require global resources and talent, capital and operating capacity
  • Former US Treasury Secretary Steven Mnuchin highlights opportunities for investment in clean energy and energy transformation in the wider Middle East

LONDON: It is important that investors understand the long-term structural changes to the Saudi economy that are taking place and the opportunities they offer, the head of the National Development Division at the Saudi Public Investment Fund said on Thursday.

Speaking at the Future Investment Initiative Priority forum in Miami, Jerry Todd said the three pillars of this transformation are industrialization of the economy, the development and expansion of service sectors, and the building-up of green energy capacity.

“Vision 2030 is the blueprint for this economic transformation, and it is a national project but it requires global resources, global talent, capital and operating capacity,” he said. “The attraction of those into the Kingdom is embedded into that blueprint.

“The question of what happens next is really a function of whether people in this room, and people in rooms like this, are learning more and trying to understand what’s happening (in the Kingdom). Personally, I’m optimistic, I think there’s a growing awareness of the opportunities being created.

“(Another thing that is changing) is the ability of the domestic economy to absorb longer-term investment, in large part through the industry-building that’s happening as part of Vision 2030. It’s creating chances for people to come in and capture asset-level opportunities.”

Former US Treasury Secretary Steven Mnuchin said there are a lot of opportunities for investment in the wider Middle East region in relation to clean energy and energy transformation. (Screenshot/FII Priority)

Former US Treasury Secretary Steven Mnuchin echoed that sentiment and said there are a lot of opportunities for investment in the wider Middle East region in relation to clean energy and energy transformation.

He warned, however, that if the region is to remain an attractive investment hub, the threat Iran poses to regional stability and security must be addressed, primarily through tougher and more rigidly enforced sanctions on the regime in Tehran.