Baidu (09888.HK) will announce its second-quarter results on Tuesday. According to a FactSet survey of 11 analysts, Baidu's second-quarter net profit is expected to be RMB 2.82 billion, a significant decrease from RMB 7.32 billion in the same period last year; second-quarter revenue is expected to be RMB 31.34 billion, lower than RMB 32.71 billion in the same period last year. Fitch Ratings points out that emerging AI search and competition from various chatbots may put pressure on the monetization capabilities of Baidu's search business. Baidu's declining profitability reflects the weakening of its traditional businesses and relatively low profit margins in non-marketing businesses. Citigroup expects Baidu's core business revenue to decline by 3.6% year-on-year in the second quarter, with advertising revenue declining by 20% year-on-year, while revenue from Baidu's AI cloud infrastructure business is expected to increase by 60% year-on-year.
