Fitch Ratings has kept its A long-term foreign and local currency issuer default ratings and foreign currency senior unsecured rating on China's Baidu (HKG:9888), according to a Friday release.

Continued leadership in search engine and artificial intelligence (AI) technologies, which boosts future growth in the AI cloud business and generative AI content monetization, serves as a rating support.

However, the company's online marketing revenue and profitability could be hit by macroeconomic challenges in the short term.

Fitch also expects the company to continue posting a high free cash flow margin and carry out effective cost control, with EBITDA leverage to remain at around 2.1x.

A rating upgrade is not likely given Fitch's profit growth expectation.

Meanwhile, a downgrade may be possible if the company sees greater government intervention, a significant market share loss, notable merger and acquisition moves or a sustained drop in operating cash flow, among other factors.

Price (HKD): $86.75, Change: $-2.0, Percent Change: -2.20%