Executive Summary

• Baidu reported 4Q16 non-GAAP diluted EPS of ¥13.23, up 73.9% year over year, beating the consensus by 77.1%. Revenue was ¥18.21 billion, down 2.6% year over year and in line with consensus, as the company took measures to revamp its advertising practices to meet stringent requirements for vetting advertising customers.
• Baidu’s gross merchandise value (GMV) totaled ¥18.1 billion (US$2.6 billion) for 4Q16, an increase of 23% year over year. Mobile search monthly active users (MAU) and mobile maps MAUs for December 2016 were up 2% and 13% year over year, respectively.
• Management guides for 1Q17 revenue of ¥16.48–¥17.03 billion, an increase of 4.2%–7.6% year over year.