• Fri
  • Jul 25, 2014
  • Updated: 12:37am

Baidu keen to list in HK but says not this year

PUBLISHED : Friday, 15 February, 2008, 12:00am
UPDATED : Friday, 15 February, 2008, 12:00am

Baidu.com, operator of the mainland's largest online search engine, says its plan to list shares in Hong Kong is unlikely to take place this year but remains interested in listing options that could add value to investors and customers.

A Hong Kong listing would be 'unlikely this year', chief executive Robin Li Yanhong said after the firm announced a 74 per cent jump in fourth-quarter profit. He did not elaborate.

Market observers said Baidu, which had about US$185 million in cash at the end of last year, did not need additional funds from a listing in Hong Kong, whose stock market had been rather volatile over the past two months.

'The company does not have much immediate need for cash,' said Dick Wei, an analyst at JP Morgan. 'It has to find a replacement for its chief financial officer first before making any listing plan.' Last November, Nasdaq-listed Baidu indicated that it may seek a listing in Hong Kong as it steps up competition with newly listed Alibaba Group in the online auction market.

'We would like Chinese investors to have access to a Chinese search company,' Mr Li said at the time. 'Listing on the mainland is difficult as regulators still ban share sales by companies registered offshore' but the firm will look into 'all kinds of opportunities'.

Baidu posted a 74 per cent growth in its net profit to US$30.1 million for the quarter to December from a year earlier. Sales grew 111 per cent to US$78.3 million.

The number of active online marketing customers grew to more than 155,000, compared with 108,000 a year ago. It was 143,000 in the third quarter.

Full-year sales rose 108 per cent to US$239.1 million last year, from US$113.6 million a year ago.

'We still like the stock in the long run but we believe there are some uncertainties in traffic and revenue growth in the first quarter of this year,' Mr Wei said.

For the first quarter, the company expects revenue of between US$73.1 million and US$75.1 million, a 93 per cent to 99 per cent growth from a year ago but down 4 per cent to 7 per cent quarterly.

Shares of Baidu closed 6.4 per cent up to US$261.90 on the Nasdaq on Wednesday and its American depositary shares further rose 4.9 per cent to US$274 in after-hours trading.

'The decline in the first-quarter guidance was caused by the mainland's record heavy snowstorms, which had a negative impact on online advertising, paid listing and new customer acquisition,' said Richard Ji, an executive director at Morgan Stanley.

'However, Baidu is still the dominant player on the mainland as its paid-search market share in terms of traffic rose to 72 per cent in the fourth quarter, compared with 69 per cent in the third. Google and Yahoo shared the bulk of the remainder.'

Analysys Research said Baidu had a share of about 60 per cent in terms of revenue on the mainland, while Google had 26 per cent and Yahoo had 10 per cent.

Cash-rich

Analysts say Baidu had US$185 million in cash at the end of last year

Baidu's paid-search market share in terms of traffic on the mainland rose in the fourth quarter to: 72%

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