Baidu, Full Truck & XPeng Q1 Earnings Results Reviewed

Q1 Earnings Reports

Baidu

Search giant Baidu (9888 HK, BIDU), which has AI ambitions, released its Q1 financial results after the Hong Kong close today.

• Revenue increased by +3% to RMB 32.45B ($4.47B) from RMB 31.50B and versus expectations of RMB 31.00B.
• Baidu Core (Search) revenue increased by +7% to RMB 25.46B ($3.51) from RMB 23.80B.
• Adjusted Net Income fell by -8% to RMB 6.47B ($891mm) from RMB 7.01B and versus expectations of RMB 5.04B.
• Adjusted EPS fell by -7% to RMB 18.54 ($2.55) from RMB 19.19 and versus expectations of RMB 14.97.

Full Truck Alliance

Full Truck Alliance (YMM US), a digital freight platform/Uber for truck drivers, reported Q1 results after the Hong Kong close. I hope management speaks to a Hong Kong secondary listing to mitigate a policy error surrounding US-listed China ADRs.

• Revenue increased by +19% to RMB 2.70B ($372.10mm) from RMB 2.27B and versus expectations of RMB 2.66B.
• Adjusted Net Income increased by 85% to RMB 1.39B ($191.70mm) from RMB 756mm and versus expectations of RMB 1.27B.
• Adjusted EPS increased to RMB 1.32 ($0.18) from RMB 0.72 and versus expectations of RMB 1.23.
• Full Truck’s forecast for total net revenues is expected to be between RMB 3.06 billion and RMB 3.12 billion for the second quarter of 2025, representing a year-over-year growth rate of approximately 10.6% to 12.9%.

Xpeng

Electric Vehicle maker XPeng (9868 HK, XPEV US) released Q1 financial results after the Hong Kong close today.

• Total revenues increased by +141.5% to RMB 15.81 billion (US$2.18 billion) from RMB 6.55 billion.
• Adjusted Net Income Loss declined to RMB 0.43 billion (US$0.06 billion) from RMB 1.41 billion.
• Adjusted EPS Loss declined to RMB -0.72 (-$0.10) from RMB -0.70 and versus expectations of RMB -0.99.
• Q2 Forecast: Deliveries of vehicles to be between 102,000 and 108,000, representing a year-over-year increase of approximately 237.7% to 257.5%. Total revenues to be between RMB 17.5 billion and RMB 18.7 billion, representing a year-over-year increase of approximately 115.7% to 130.5%.

Key News

Asian equities were broadly higher overnight, led by gains in Taiwan, while Japan and Thailand underperformed as a CNN report on an Israeli strike against Iran’s nuclear facilities drew global attention.

Energy stocks rose in response to the news, alongside gains in precious metals and coal in both Hong Kong and Mainland China. Value stocks in Mainland China outperformed growth stocks, while Hong Kong growth stocks rebounded, seemingly dismissing concerns raised by yesterday’s Financial Times article, “Top US state Republicans urge SEC to consider delisting Chinese companies.”

The Financial Times article referenced a letter from twenty-one US state Republican financial officers, which contained several inaccuracies and misstatements. Notably, the Financial Times did acknowledge that Chinese companies had received a clean bill of health from both the US Securities and Exchange Commission (SEC) and the Public Company Accounting Oversight Board (PCAOB). In meetings with several global financial institutions in Hong Kong, local sentiment was clear: the few remaining US-listed Chinese companies without a Hong Kong listing are expected to relist in the city. The timing of the letter coincided with Contemporary Amperex Technology Co. Limited’s (CATL) Hong Kong initial public offering—the world’s largest so far this year—which, in previous years, would likely have taken place in New York. As a result, Hong Kong Exchanges & Clearing Limited (HKeX) rose 3.27%.

CATL shares advanced another 10.19% in Hong Kong, with BYD Company Limited up 4.05%, Li Auto Inc. up 4.05%, and Geely Automobile Holdings Limited up 3.09%. Internet stocks also performed well, as Alibaba Group Holding Limited gained 1.15% after announcing a partnership with Meitu Inc., a provider of photo-editing and beautification applications with strong connections in the cosmetics industry. Meitu’s shares surged 18.98% on the news. The healthcare sector maintained positive momentum in both markets following yesterday’s licensing agreement between 3SBio Inc. and Pfizer Inc.

Mainland investors purchased $182 million of Hong Kong-listed stocks via the Southbound Stock Connect. In policy news, eight Chinese government agencies, including the People’s Bank of China (PBOC), announced “Several Measures to Support the Financing of Small and Micro Enterprises.” Small businesses account for the majority of employment in Mainland China, and these measures are intended to ease access to loans and reduce financing costs.

A Mainland media source reported the completion of the third version of the China-ASEAN Free Trade Zone agreement, though details remain limited. Despite yesterday’s Loan Prime Rate (LPR) cut, Mainland China equities did not see stronger gains, highlighting that restoring consumer confidence will take time. On a positive note, April tax revenue increased for the first time this year, signaling a tentative economic rebound.

The 618 E-Commerce event, initiated by JD.com and now adopted by other platforms, is starting earlier than usual this year. While the event may boost top-line revenue growth, the associated discounts could weigh on margins and net income. Earnings per share (EPS) should benefit from continued share buybacks.

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Last Night’s Performance

Last Night’s Exchange Rates, Prices, & Yields

CNY per USD 7.20 versus 7.21 yesterday

CNY per EUR 8.16 versus 8.12 yesterday

Yield on 10-Year Government Bond 1.71% versus 1.70% yesterday

Yield on 10-Year China Development Bank Bond 1.71% versus 1.70% yesterday

Copper Price +0.30%

Steel Price -0.03%