CFDs are leveraged products. CFD trading may not be suitable for everyone and can result in losses that exceed your deposits, so please consider our Risk Disclosure Notice and ensure that you fully understand the risks involved. CFDs are leveraged products. CFD trading may not be suitable for everyone and can result in losses that exceed your deposits, so please consider our Risk Disclosure Notice and ensure that you fully understand the risks involved.

Baidu’s share price spiked 7.78% higher after Q2 sales top estimates

The group posted a 1.4% increase in revenue for the three months ended June, at 26.33 billion yuan (US$3.73 billion), higher than analysts' estimates of 25.8 billion yuan.

China’s online-search giant Baidu surprised analysts on Monday with a quarterly revenue that beat estimates as the firm held on to its advertising numbers despite intense competition from rivals and a slower macroeconomic environment.

The group posted a 1.4% increase in revenue for the three months ended June, at 26.33 billion yuan (US$3.73 billion), it said in the results statement after trading hours on Monday. The performance was higher than analysts' estimates of 25.8 billion yuan.

Shares of Baidu rose as much as 10% in extended trading on Monday, before settling 7.78% or US$7.52 higher, at US$104.22.

The Nasdaq-listed shares have faced some severe headwinds brought on by weak advertisement revenue projections amid the slow economic growth in China and aggressive competition. Year-to-date, Baidu’s shares have fallen by 35.8%, from US$162.25 on January 2, 2019.

‘Facing severe outside challenges and a weak macro environment, the company has initiated a series of ground-breaking changes from top to bottom, involving company structures, personnel moves and business consolidation…Despite periodic pain, these changes will have positive and profound impact, enabling Baidu to walk farther and steadier,’ the group’s chief executive Robin Li had said in a letter to employees after the results.

The group’s revenue of its core businesses grew 12% from a year ago. Net income meanwhile, fell to 2.41 billion yuan.

Revenue from Baidu’s video streaming service iQiyi rose by 15% to 7.11 billion yuan, as the service passed the 100 million subscriber mark in June this year, despite tough competition from rivals such as ByteDance’s TikTok.

Sales from its online marketing services, a significant contributor to overall sales however, fell 9% to 19.2 billion yuan, due to tighter advertisement regulations by the government and the impact from the China-United States trade war.

Baidu said it expects its overall revenue for the current quarter to be between 26.9 billion yuan to 28.5 billion yuan.

As the country’s internet advances, the 19-year old firm has to deal with competition from new contenders. It recently toppled off the list of China’s five most valuable internet companies, according to Bloomberg, after it lost more than 40% of its market value this year.

In the previous quarter, Baidu posted its first quarterly loss since 2015, the year it got listed. The announcement caused Baidu’s shares to shed more than 15% in a day.


The information on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG Bank S.A. accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. See full non-independent research disclaimer.

Act on share opportunities today

Go long or short on thousands of international stocks with CFDs.

  • Get full exposure for a comparatively small deposit
  • Trade on spreads from just 0.1%
  • Get greater order book visibility with direct market access

See opportunity on a stock?

Try a risk-free trade in your demo account, and see whether you’re on to something.

  • Log in to your demo
  • Take your position
  • See whether your hunch pays off

See opportunity on a stock?

Don’t miss your chance – upgrade to a live account to take advantage.

  • Trade a huge range of popular stocks
  • Analyse and deal seamlessly on fast, intuitive charts
  • See and react to breaking news in-platform

See opportunity on a stock?

Don’t miss your chance. Log in to take your position.

Live prices on most popular markets

  • Forex
  • Shares
  • Indices
liveprices.javascriptrequired
liveprices.javascriptrequired
liveprices.javascriptrequired

Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 15 mins.

You might be interested in…

Find out what charges your trades could incur with our transparent fee structure.

Discover why so many clients choose us, and what makes us a world-leading provider of CFDs.

Stay on top of upcoming market-moving events with our customisable economic calendar.