Baidu chief confident on ability of Chinese business to recover from coronavirus despite ‘undoubted’ near-term impact

Baidu chief executive Robin Li Yanhong has expressed confidence in the ability of businesses to recover from the coronavirus outbreak, despite warning that the health crisis will have “undoubted” near-term impact on the overall Chinese economy.

A wide range of industries including travel, real estate, autos, health care and franchising have been “suffering from reduced offline activities”, the billionaire founder said in an earnings call on Friday, as the company reported better-than-expected results for the fourth quarter, with a 6 per cent year-on-year increase in revenue to 28.9 billion yuan (US$4.15 billion).

Nasdaq-listed Baidu expects sales in the March quarter to be between 21 billion yuan and 22.9 billion yuan, representing a 5 to 13 per cent decline, partly because of the epidemic. Its shares dropped 2.9 per cent at the close on Thursday when the revenue guidance fell short of analysts’ average estimate.

The deadly virus forced China into an extended Lunar New Year break, with the epidemic’s epicentre of Wuhan and the rest of Hubei province undergoing a month-long lockdown. Although at least 24 of the country’s 31 provinces and municipalities had told businesses not to open before February 10 at the earliest, most public places including cinemas, shopping malls and schools remain shut.

Telecommuting is still the first choice for more than 60 per cent of companies in major Chinese cities, allowing employees to work remotely from home, statistics from Baidu showed.

Still, with most Chinese limiting travel to the bare minimum and spending more time at home, the impact has been positive for online services, according to Li.