Chinese search engine giant Baidu mulls leaving Nasdaq for market closer home to boost valuation, amid US-China tension
- Baidu is said to be seeking higher stock valuation closer home as stock slides with rising US-China tension
- Search engine’s market value is about 5 per cent of Alibaba Group’s capitalisation
Baidu, one of China’s earliest U.S. listings, is reaching out to some trusted advisers to see how it could best be done if it were to proceed, including looking at issues around funding and any regulatory reaction, they added.
The discussions are at an early stage and are subject to change, according to the sources who spoke on condition of anonymity because the matter is not public.
Baidu declined to comment.
The company pointed to comments by co-founder and Chief Executive Robin Li, who told China Daily on Thursday that Baidu was paying close attention to the tighter US scrutiny of Chinese companies listed in the country.
“For a good company, there are many choices of destinations for listing, not limited to the US,” Li said to the state-controlled newspaper.
The Beijing-based search-engine operator’s market capitalisation of US$29.6 billion (HK$229.4 bbillion) as of Wednesday’s close is only equivalent to 5 per cent of the market value of Alibaba Group, which has shares listed in Hong Kong and New York.
Chinese technology companies like Baidu, Ctrip and NetEase Inc have all held preliminary talks with Hong Kong Exchanges and Clearing about a possible secondary listing to follow in the footstep of Alibaba in establishing an investor base closer to China.
The latest move by Baidu comes as US-listed Chinese companies face increased pressure amid heightened tensions between the world’s two biggest economies.
The US senate passed a bill on Wednesday that could stop some Chinese companies listing on US exchanges unless they follow standards for US audits and regulations. This move is seen as an escalation of a long-running dispute between Washington and Beijing about giving US regulators access to Chinese audits.
At home, Baidu has been struggling with a slowing economy and rising competition from domestic players such as ByteDance. Last year, the owner of popular video-sharing app TikTok launched a search engine in China.
Baidu posted a 7 per cent drop in first-quarter revenue this year. While its sales were better than analysts had expected, it was the biggest year-on-year drop since the company went public in 2005.
The group generates the majority of its revenue from online marketing services, which include searches, news feeds and video apps.