Country Daily
Baidu Inc_CSPC Innovation Pharmaceutical / Hesai Group / Pony AI / Xiaomi Corp
Analyst
Key Indices
Top Stories
Company Results | Baidu Inc (9888 HK/BUY/HK$101.10/Target: HK$145.00)
Baidu’s 2Q26 results were below expectations. Revenue declined 4.2% yoy to Rmb31.3b, slightly below our estimates. Gross margin contracted 4.9ppt yoy to 39%, in line with expectations. Non-GAAP operating profit fell 14.8% yoy to Rmb3.8b, with non-GAAP operating margin at 12.1%. Meanwhile, non-GAAP net profit declined 46.3% yoy to Rmb2.6b, missing our and consensus forecasts. Maintain BUY with a slightly lower target price of HK$145.00 (US$148.00).
Company Results | CSPC Innovation Pharmaceutical Co (300765 CH/BUY/Rmb44.40/Target: Rmb57.00)
CSPC Innovation reported a revenue increase of 208.7% yoy and an adjusted net profit of Rmb1,225.9m in 1H26 (1H25: -Rmb41.1), supported by the recognition of 70% of AstraZeneca’s US$420m upfront payment. Robust out-licensing income and biopharma sales will drive revenue and earnings for 2026. With steady R&D progress, we expect a growing pipeline of innovative product launches to support sustainable earnings growth from 2028 onwards. Maintain BUY and raise target price to Rmb57.00.
Company Results | Hesai Group (2525 HK/BUY/HK$18.34/Target: HK$29.00)
2Q26 results miss estimates with net profit of Rmb70.6m (+60% yoy/+285% qoq) and adjusted net profit of Rmb101m (+38% yoy/+112% qoq) on lower-than-expected ASP and other incomes. Blended ASP fell 10% qoq to Rmb1,294, but gross margin recovered 1.0ppt qoq to 40.1%. We cut our 2026-28 net profit forecasts by 27%/17%/12% to Rmb400m/Rmb758m/Rmb1,200m respectively on lower ASP and other incomes. Maintain BUY and cut our target price from HK$33.00 to HK$29.00.
Company Results | Pony AI (PONY US/BUY/US$7.98/Target: US$15.00)
Pony.ai's 2Q26 net loss attributable to shareholders widened 12.7% yoy to US$59.8m, 4.2% narrower than our US$62.5m estimate as a US$18.6m fair-value gain offset a US$25.0m one-off impairment. Revenue beat expectations at US$36.2m (+68.8% yoy), driven by a 691.2% yoy surge in robotaxi services. We raise our 2026 revenue forecast by 6.1% but widen our 2026-27 net loss estimates by 10.9%/7.4%. Maintain BUY and cut target price to US$15.00.
Company Results | Xiaomi Corp (1810 HK/HOLD/HK$26.18/Target: HK$26.20)
Xiaomi's 2Q26 revenue declined 6.1% yoy but rose 9.9% qoq to Rmb108.9b, 5.7% above our estimate, while adjusted net profit plunged 42.6% yoy to Rmb6.2b as blended gross margin contracted 2.7ppt yoy to 19.8%. Smartphone revenue beat on premiumisation-driven ASP gains and may be approaching a better-than-expected trough, but margins deteriorated across the smartphone, IoT and EV segments on rising memory costs and new-business dilution. Maintain HOLD with a lower target price of HK$26.20.
Top Stories
Company Results | Baidu Inc (9888 HK/BUY/HK$101.10/Target: HK$145.00)
Baidu’s 2Q26 results were below expectations. Revenue declined 4.2% yoy to Rmb31.3b, slightly below our estimates. Gross margin contracted 4.9ppt yoy to 39%, in line with expectations. Non-GAAP operating profit fell 14.8% yoy to Rmb3.8b, with non-GAAP operating margin at 12.1%. Meanwhile, non-GAAP net profit declined 46.3% yoy to Rmb2.6b, missing our and consensus forecasts. Maintain BUY with a slightly lower target price of HK$145.00 (US$148.00).
Company Results | CSPC Innovation Pharmaceutical Co (300765 CH/BUY/Rmb44.40/Target: Rmb57.00)
CSPC Innovation reported a revenue increase of 208.7% yoy and an adjusted net profit of Rmb1,225.9m in 1H26 (1H25: -Rmb41.1), supported by the recognition of 70% of AstraZeneca’s US$420m upfront payment. Robust out-licensing income and biopharma sales will drive revenue and earnings for 2026. With steady R&D progress, we expect a growing pipeline of innovative product launches to support sustainable earnings growth from 2028 onwards. Maintain BUY and raise target price to Rmb57.00.
Company Results | Hesai Group (2525 HK/BUY/HK$18.34/Target: HK$29.00)
2Q26 results miss estimates with net profit of Rmb70.6m (+60% yoy/+285% qoq) and adjusted net profit of Rmb101m (+38% yoy/+112% qoq) on lower-than-expected ASP and other incomes. Blended ASP fell 10% qoq to Rmb1,294, but gross margin recovered 1.0ppt qoq to 40.1%. We cut our 2026-28 net profit forecasts by 27%/17%/12% to Rmb400m/Rmb758m/Rmb1,200m respectively on lower ASP and other incomes. Maintain BUY and cut our target price from HK$33.00 to HK$29.00.
Company Results | Pony AI (PONY US/BUY/US$7.98/Target: US$15.00)
Pony.ai's 2Q26 net loss attributable to shareholders widened 12.7% yoy to US$59.8m, 4.2% narrower than our US$62.5m estimate as a US$18.6m fair-value gain offset a US$25.0m one-off impairment. Revenue beat expectations at US$36.2m (+68.8% yoy), driven by a 691.2% yoy surge in robotaxi services. We raise our 2026 revenue forecast by 6.1% but widen our 2026-27 net loss estimates by 10.9%/7.4%. Maintain BUY and cut target price to US$15.00.
Company Results | Xiaomi Corp (1810 HK/HOLD/HK$26.18/Target: HK$26.20)
Xiaomi's 2Q26 revenue declined 6.1% yoy but rose 9.9% qoq to Rmb108.9b, 5.7% above our estimate, while adjusted net profit plunged 42.6% yoy to Rmb6.2b as blended gross margin contracted 2.7ppt yoy to 19.8%. Smartphone revenue beat on premiumisation-driven ASP gains and may be approaching a better-than-expected trough, but margins deteriorated across the smartphone, IoT and EV segments on rising memory costs and new-business dilution. Maintain HOLD with a lower target price of HK$26.20.
Analyst
Key Indices
IMPORTANT NOTICE - DISCLOSURES AND DISCLAIMERS
This report is provided subject to, and must be read together with, the full Disclosures / Disclaimers available at this link, which are incorporated by reference into this report. In particular, this report is intended for general circulation and informational purposes only and does not constitute personal investment advice or a recommendation to buy or sell any investment product or security. You should independently evaluate the information and, where necessary, seek advice from a qualified financial adviser regarding the suitability of any investment. Analyst certifications required under applicable regulations, including SEC Regulation AC (where relevant), are included in this report. By accessing, receiving or using this report, you acknowledge that you have read, understood and agreed to be bound by the Disclosures / Disclaimers, as may be amended, supplemented or updated from time to time.
