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Produced by Radar Finance | Edited by Xiao Sha | Deep Sea

Baidu boss lady Ma Dongmin cashed out a large sum of money from Baidu.

At the beginning of last month, Baidu's US stocks issued an announcement of planned share reduction. Ma Dongmin planned to reduce his holdings of Baidu shares by 260,000 ADS, worth US$22.4146 million, and the "approximate sale date" was July 1.

Ma Dongmin is the wife of Baidu founder, chairman and CEO Robin Li. Since the beginning of this year, Ma Dongmin, Baidu senior vice president Liang Zhixiang, independent director Brent Callinicos and others have cashed out intensively. Among them, Ma Dongmin has reduced her holdings three times since the beginning of the year, with a total cash out amount of US$92.0826 million.

In 2023, Ma Dongmin cashed out more than 60 times, with a total cash amount of 243.1318 million US dollars. Based on this calculation, since 2023, Ma Dongmin's cumulative cash out amount has reached 335.2144 million US dollars, equivalent to about 2.4 billion yuan.

In terms of performance, Baidu's revenue in the first quarter of this year increased by 1% year-on-year, but fell by 10% month-on-month. At the same time, Baidu's net profit fell by 6% year-on-year. After the financial report, Baidu's US and H shares were downgraded by institutions, and the company's stock price also hit a new low this year on August 5, with a decline of about 30% since the beginning of the year.

Since 2023, Ma Dongmin has reduced his holdings more than 60 times

Ma Dongmin has sold off Baidu shares several times, which has attracted attention from the outside world.

According to Baidu's US stock disclosure, from April to June last year, Ma Dongmin sold Baidu shares 27 times, cashing out a total of US$51.5221 million.

On July 3 last year, Baidu disclosed that Ma Dongmin planned to sell 390,000 ADS shares, and the "approximate sale date" was July 5. Calculated at the delivery price, the value was US$53.3949 million.

Subsequently, from July 5 to September last year (excluding the sale of 390,000 ADS on July 5), Ma Dongmin cashed out US$54.6583 million in 26 times.

On October 2 last year, Baidu disclosed that Ma Dongmin planned to sell 390,000 ADS, with the amount of reduction being approximately US$52.3965 million.

Ma Dongmin's cashing out journey did not end there. From October 3 to December last year, Ma Dongmin cashed out 31.16 million US dollars in 8 times.

Since 2024, Ma Dongmin's frequency of cashing out has decreased.

According to Baidu's US stock disclosure, on January 2 this year, Ma Dongmin planned to sell 466,500 ADS with a reference market value of US$55.5591 million.

On April 2, Ma Dongmin planned to sell 130,000 ADS of Baidu shares, with a reference market value of US$14.1089 million.

On July 1 this year, Ma Dongmin planned to sell 260,000 ADS of Baidu shares, with a reference market value of US$22.4146 million.

Based on this calculation, from 2023 to date, Ma Dongmin has cashed out a total of US$335 million, equivalent to about RMB 2.4 billion.

Public information shows that Ma Dongmin is from Hefei, Anhui Province. She holds a PhD in biology and graduated from the Junior Class of the University of Science and Technology of China. She graduated and went abroad at the age of 19. At that time, she was known as the "princess" in the New York international student circle.

In 1995, Li Yanhong met Ma Dongmin at a gathering of Chinese students in New York. At that time, Ma Dongmin was pursuing a doctorate in the Department of Biology at the University of New Jersey. The two got married that year.

In 1999, Li Yanhong returned to China to found Baidu, and his wife also provided great support for his career. It is reported that in 2001, when the two were shopping in Wangfujing, Ma Dongmin saw a store offering a "buy a product and get a free silk scarf" promotion. She came up with the idea of ​​"pay-per-view ranking", which helped Baidu achieve a profit of 10 million US dollars that year, reversing its previous decline.

When Baidu went public, Robin Li publicly stated that the person he should thank most for his success today was Ma Dongmin. In 2017, media reported that Ma Dongmin returned to Baidu and assisted Robin Li in managing the company's business as the chairman's special assistant, specifically involving Baidu's investment, human resources and financial work.

It is worth noting that in addition to Ma Dongmin, Baidu's management has also reduced its holdings several times since 2023. The reducers include Baidu's executive vice president and president of the Intelligent Cloud Business Unit Shen Dou, Baidu's senior vice president Liang Zhixiang, and independent director Brent Callinicos.

On June 15, 2023, Baidu disclosed that Shen Dou planned to cash out US$8.6483 million.

On February 29 this year, Baidu announced that Liang Victor Zhixiang planned to sell 11,300 ADS of Baidu shares, with a planned reduction of US$1.1678 million. Baidu's investor relations website shows that Liang Victor Zhixiang, whose Chinese name is Liang Zhixiang, joined Baidu in 2005.

In addition, Baidu director Brent Callinicos cashed in about $409,200 from two stock sales this year.

Baidu's 2023 annual report shows that Robin Li holds approximately 18.2% of Baidu's shares and 59.3% of its voting rights.

Revenue in the first quarter increased by only 1% year-on-year

In early May, some remarks made by Qu Jing, then vice president of public relations at Baidu, on her personal social media account sparked widespread controversy and dragged Baidu into a whirlpool of public opinion.

In the video, Qu Jing adopted a cold and impatient attitude towards the personal family life of employees. For example, she said, "When an employee breaks up and asks to resign, I approve it immediately. Why should I consider the employee's family?" "If you refuse to go on business trips with me for 50 consecutive days, don't come to me for a promotion and salary increase"... This caused strong dissatisfaction among netizens.

After the incident, Qu Jing issued an apology letter, expressed deep remorse, and left Baidu. After the incident, Robin Li gave an internal award and gave a speech, "You (the winning teams and individuals) represent Baidu, you represent the most authentic Baidu, you are the most authentic representatives of Baidu."

On May 16, Baidu announced its first quarter results for 2024. According to iFinD data from Tonghuashun, Baidu achieved operating income of 31.513 billion yuan in the first quarter, a year-on-year increase of 1% and a decrease of 10% from the fourth quarter of last year; the net profit attributable to Baidu was 5.448 billion yuan, a year-on-year decrease of 6% and a month-on-month increase of 110%.

The financial report shows that Baidu's core revenue in the first quarter was 23.803 billion yuan, a year-on-year increase of 4% and a month-on-month decrease of 13%; the net profit attributable to Baidu Core was 5.15 billion yuan, a year-on-year decrease of 7% and a month-on-month increase of 111%.

In terms of core revenue, Baidu's online marketing revenue in the first quarter was RMB 17 billion, up only 3% year-on-year. Some analysts pointed out that in the context of increasing global economic uncertainty and tightening corporate budgets, advertisers' cautious attitude towards budget placement has directly affected Baidu, which relies on advertising revenue.

In a conference call after the first quarter report, Baidu's management also admitted that the weakness of the advertising business was mainly caused by the weak macro-economy. The company's advertisers are mainly small and medium-sized enterprises from all walks of life, which are highly sensitive to the macro environment. In the first quarter, advertiser sentiment in vertical fields such as real estate and franchising remained weak.

The company's management noted that it did not see an improvement in advertiser sentiment heading into the second quarter and expected online marketing revenue growth to be weak. Despite the challenges, online marketing is expected to remain Baidu's main business.

The advertising market is full of chill, and Baidu needs to accelerate the diversified transformation of its business model, among which non-online marketing business becomes the key. This part achieved revenue of RMB 6.8 billion in the first quarter, a year-on-year increase of 6%.

Baidu's non-online marketing business includes the revenue of innovative businesses such as Baidu Cloud, Xiaodu and autonomous driving business. Baidu's financial report stated that the revenue of non-online marketing business in the first quarter was mainly driven by the intelligent cloud business.

However, due to the relatively small overall scale of the non-online marketing business, its single-digit growth rate is not enough to fully offset the impact of the sluggish growth in the advertising business.

Regarding intelligent cloud, management stated in the conference call that Baidu's AI cloud revenue increased from a year-on-year decline in the third quarter of last year to 11% in the fourth quarter of last year, and then accelerated to 12% in the first quarter of this year.

It should be noted that in the public cloud industry, the market price war that started in 2023 has continued to this day. The industry believes that this will make it more difficult for Internet cloud vendors to make profits.

However, Baidu's management did not disclose the profitability of Baidu Cloud, only stating that since the company's cloud products have expanded from traditional CPU cloud to high-value AI products and services, industry changes have minimal impact on the development of AI cloud business.

The subsidiary iQiyi achieved revenue of 7.9 billion yuan in the first quarter, a year-on-year decrease of 5%. According to iQiyi's financial report, the company's net profit in the first quarter was about 655 million yuan, an increase of about 6.02% year-on-year; non-GAAP (non-US Generally Accepted Accounting Principles) net profit was about 844 million yuan, a year-on-year decrease of about 10.31%.

Baidu shares are lower this year

Radar Finance noticed that after Baidu announced its first quarter results, several investment banks downgraded its ratings and target prices.

On May 17, Morgan Stanley downgraded Baidu's rating from "overweight" to "hold" and adjusted the target price from US$140.00 to US$125.

On the same day, Macquarie published a report pointing out that although Baidu's first-quarter results were generally in line with expectations and its profits were resilient, the company is entering a transformation cycle and is accelerating the integration of artificial intelligence technology and core advertising products. However, it may take time to fully rebuild user-end products. In addition, continued short-term macroeconomic uncertainties may further limit Baidu's growth and profit potential. In the absence of growth momentum, the bank downgraded its rating from "outperform" to "neutral" and its target price from HK$133 to HK$111.

On July 17, UBS Group lowered Baidu's target price to HK$146, while maintaining a "buy" rating. UBS pointed out in the report that Baidu's advertising business will continue to be under pressure in the short term, and it is expected that core advertising revenue in the second quarter will fall by 3% year-on-year.

Goldman Sachs also lowered its target price for Baidu's ADR from US$153 to US$144, while lowering its target price for its Hong Kong-listed shares from HK$150 to HK$141.

It is worth noting that the concept of driverless taxis, which has been popular in the A-share market recently, was brought to the fore by Baidu's autonomous driving travel service platform "LuoBoKuaiPao".

Tianyancha App shows that Luobo Kuaipao's affiliated company Luobo Yunli (Beijing) Technology Co., Ltd. was established in December 2020. The legal representative is Bi Ran. The registered capital is 10 million yuan. It is jointly held by Baidu's two vice presidents, Li Zhenyu and Shang Guobin.

Baidu said in its first quarterly report that its autonomous driving service, LuoBoKuaiPao, had provided about 826,000 autonomous driving orders, a year-on-year increase of 25%. As of April 19, 2024, LuoBoKuaiPao had provided more than 6 million autonomous driving travel service orders to the public.

However, as the driverless car business has made new progress, related public opinion has also followed, involving issues such as its "stealing jobs" from taxi drivers and safety.

Recently, an insider revealed that the Luobo Kuaipao app in Wuhan, Hefei and other places has been suspended due to public pressure. However, a person from Baidu responded that the suspension rumor is untrue, the product in Hefei is undergoing technical upgrades, and the service in Wuhan is still operating normally.

Although Robotaxi continues to attract attention, some institutions say it is still far from profitability. Founder Securities pointed out that the intelligent driving business has long-term market potential, but its contribution to profits in the short term is relatively limited. Currently, the operating cost of Robotaxi is higher than that of online car-hailing and taxi services, but with the advancement of technology and the improvement of economies of scale, the cost is expected to gradually decrease.

Founder Securities also believes that the safety and riding experience advantages of smart driving are expected to attract more users. Considering the impact of R&D and operating costs, as well as policy factors, it is difficult for the smart driving business to contribute significant profits at the financial level in the short term.

In addition, the explosion of driverless business did not seem to boost Baidu's stock price. On August 5, Baidu's Hong Kong stocks closed down 2.93%, and hit a new low of HK$79.5 per share during the session. Since the beginning of the year, the company has fallen by about 30.19%.