Chinese internet-search giant Baidu(BIDU) - Get Report is scheduled to announce its fourth quarter and fiscal year earnings after the market closes today. Analysts expect the Nasdaq-listed company, whose shares have risen from $168.30 to about $185 so far this year, to deliver a decline in sales and profit despite improved sentiment towards Chinese internet stocks this year.

The company's shares were down less than 1% in early afternoon trading Thursday.

Although Baidu has experienced a top-line growth of 12.6% this year, analysts hold the consensus that the Beijing-based company is still yet to recover from a regulatory probe into its ad placements last year, significant margin erosion resulting from investments in local services and online video, as well as intensifying competition from long-time rivals Alibaba (BABA) - Get Report and Tencent.

Baidu's shares tanked last May after the death of a Chinese student who underwent experimental cancer treatment he found via a false ad on Baidu. The scandal triggered national outcry and prompted Chinese authorities to impose stricter limits on how tobacco and medicine ads are distributed online. Analysts believe that Baidu's compliance with the new harsher regulations would weigh heavily on its results as healthcare provides 20% to 30% of the company's search revenue, according to research from Nomura and Daiwa.

Baidu is often considered as China's Google, the core business of Alphabet(GOOGL) - Get Report  It is similar to the company beyond search engine technology in that both like to invest broadly in businesses such as video streaming, autonomous driving and artificial intelligence. But the heavy investments have come with spiraling costs, which continue to erode its margins.

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Baidu has particularly hemorrhaged money from its online-to-offline business Nuomi and video content site iQiyi. In June 2015, Baidu said it would invest $3 billion in its online-to-offline businesses over the next three years. Two days ahead of today's earnings, Baidu also announced that it had raised $1.53 billion from a consortium of private-equity investors including Hillhouse Capital, Boyu Capital, Run Liang Tai Fund, IDG Capital, Everbright-IDG Industrial Fund and Sequoia Capital to fund the growth of the Netflix (NFLX) - Get Report -like website. Baidu itself spent $332 million, almost 12% of its revenue, for the latest round of investment.

Given the rapid growth of live streaming in Asia, Baidu believes that investment in high quality content is the key to monetizing its user base. iQiyi, founded in 2010, has 481 million monthly active users as of December and counts Paramount Pictures, Twenty-First Century Fox(FOXA) - Get Report and Lions Gate Entertainment as some of its global content partners. Baidu bought a controlling stake in iQiyi in 2013 and has been pushing for heavy content strategy ever since. Analysts believe that subscriber growth in iQiyi will be a key watching point in the earnings results today.

Despite pumping money into its online-to-offline and video streaming services, Baidu is still facing pressure from Alibaba and Tencent. Alibaba's own online-to-offline service unit Koubei closed a $1.1 billion financing round led by Silver Lake, CDH Investments, Yunfeng Capital and Primavera Capita in January this year. Another Netflix-style Chinese video streaming site Youku Tudou, which Alibaba bought in October 2015 for $3.5 billion, is also battling for the attention of Chinese internet users as well as mobile and online advertisers. Youku Tudou claims 580 million users each month and has almost half of its advertising revenue coming from mobile, which poses a clear threat to iQiyi.

Baidu itself seems to echo Wall Street's negative outlook too. Management expects revenues in the fourth quarter to come in the range range of RMB17.840 billion ($2.675 billion) to RMB18.380 billion ($2.756 billion), which would represent a 4.6% to 1.7% year-over-year decrease.