Daiwa Capital Markets has issued a report reiterating its "Buy" rating on Baidu Group-SW (09888). The report notes that Baidu's fourth-quarter revenue met expectations, while profits exceeded forecasts, primarily driven by cost controls that improved gross margins. Management indicated that plans to spin off the Kunlun chip unit are progressing. Daiwa views this as a potential short-term catalyst for the company's valuation. According to the firm's estimates, the implied equity value of Kunlun Chip already represents approximately half of Baidu's latest market capitalization per share, suggesting significant potential for revaluation. Daiwa also highlighted that while growth in Baidu's cloud business has slowed, its revenue structure continues to improve. Revenue from AI high-performance computing infrastructure based on subscriptions increased by 143% year-over-year last quarter, indicating enhanced profitability. Daiwa has raised its target price for Baidu from HK$171 to HK$175.