Baidu gets go-ahead for secondary listing on Hong Kong stock exchange
- Chinese search-engine giant is reportedly seeking to raise as much as US$3.5 billion
- Companies listing in Hong Kong have raised US$9.6 billion in IPO proceeds in the first two months of 2021, the highest amount ever to start a year
Baidu, China’s internet search-engine giant and artificial intelligence (AI) firm, moved a step closer to a secondary listing in Hong Kong after winning approval from the Hong Kong stock exchange’s listing committee on Thursday, according to people familiar with the matter.
The search giant’s planned listing in Hong Kong came as companies raised the highest-ever proceeds from initial public offerings on the city’s stock exchange in the first two months of this year, totalling US$9.6 billion across 22 deals, data from Refinitiv shows.
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Baidu’s IPO plan in Hong Kong came after it disclosed in February that its full-year net income surged over tenfold, to 22.5 billion yuan (US$3.5 billion) from 2.1 billion yuan in 2019.
“As we enter 2021, Baidu is well positioned as a leading AI company with a strong internet foundation to seize the huge market opportunities in cloud services, autonomous driving, smart transport and other AI opportunities,” co-founder and chief executive Robin Li said in a press release announcing the group’s February results.
“We will continue to pursue our mission to make the world simpler through technology,” he said in the press release.
On Wednesday, Baidu’s share price closed at US$277.80 in New York.
Bankers helping US-listed Chinese firms seek a secondary listing in Hong Kong are likely to have to track their US stock price levels closely when setting their offer price in Hong Kong to avoid stoking off volatility that could mire their share price, market observers said.
Apart from its search engine, social media platform and mobile apps, Baidu’s cloud service and autonomous driving platform, called Baidu Apollo, both of which are backed by its AI capabilities, have seen rapid growth in recent years.
Baidu also controls online movie and video streaming platform iQiyi, which has 101.7 million subscribers and is separately listed on Nasdaq. It recorded a net loss of 7 billion yuan in 2020, narrowing from 10.3 billion in 2019.
Additional reporting by Peggy Sito