Baidu’s startling slump in Hong Kong is deeper than Archegos’ trigger as advertising, EV business face challenges
- Baidu’s Hong Kong-listed shares have dropped 17 per cent from their IPO price, underperforming Kuaishou and Bilibili among jumbo listings
- Weak online advertising revenue, a cash-draining self-driving business and foray into EV market are key challenges

Its problems lie beyond the margin calls on Archegos Capital Management, whose US$20 billion-odd of investment holdings included Baidu and other Chinese tech stocks. Its underperformance mirrored caution surrounding its increasingly challenging business outlook and looming stock overhang.
Digital advertising business, its main source of revenue, has been shrinking since 2018, losing market share to rivals including social-media juggernauts Tencent Holdings and ByteDance that capitalised on China’s booming mobile-internet sphere.
“Baidu’s main business doesn’t have a high bar and mainly relies on advertising revenue and traffic,” said Wang Chen, a partner at Xufunds Investment Management in Shanghai. “As a traditional internet company, Baidu doesn’t have much edge on moving into new areas such as artificial intelligence and the crowded EV-manufacturing space. That’s why investors have concerns about the company.”
Its ADSs last traded at US$214.40 in New York, compared with analysts’ consensus 12-month price target of US$345.90. The 38.1 per cent price gap is the widest since December 2011, according to Bloomberg data.
