Baidu Plans to Raise up to $3.6 Billion in Hong Kong Secondary Listing

Baidu, Chinese search engine and AI giant, is planning to raise at least HK$28 billion ($3.6 billion) by selling 95 million shares in a secondary listing on the Hong Kong stock exchange, the latest US-traded Chinese tech firm to make a secondary offering in the Asian financial hub.

The Class A ordinary shares will be priced at no more than HK$295 ($38.05) per share for Hong Kong retail investors, representing 3.4% of the company’s total shares, according to its prospectus. The price is a 19% premium to Baidu’s Wednesday closing price in New York. Its Nasdaq-listed shares rose 6.76% on Thursday.

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Baidu will set the final price for its shares on March 17, and trading will begin on the Hong Kong market on March 23.

Underwriters have the option to take up an extra 14.25 million, or 15%, of shares as part of a greenshoe option, which will take the net proceeds to HK$31.8 billion ($4.1 billion).

Bank of America, Citic Securities and Goldman Sachs are sponsoring the listing.

The company said on Thursday that it plans to use the fresh funds to invest in technology and enhance commercialization of its AI innovations, further growing Baidu’s mobile ecosystem and diversifying monetization, as well as other business operations.

For two decades, Baidu has been known for its search engine and advertising, and now the Beijing-based company is looking to diversify. 

Focusing on cloud computing and smart transportation, the company has developed its autonomous driving platform Apollo and launched Robotaxis, in addition to venturing into the production of electric cars by setting up a standalone company with Chinese automaker Geely.

Baidu is among a growing cohort of companies planning to stage secondary listings in Hong Kong amid heightening tensions between China and the US, including Tencent Music Entertainment Group, micro-blogging service Weibo, online car-trading platform Autohome and video company Bilibili Inc.

Bilibili has also secured approval for a secondary listing in Hong Kong and could open its offering as early as next week, according to information released by Nikkei Asia.

Secondary listings in Hong Kong have totalled $34 billion since Alibaba kicked off the trend with a $12.9 billion float in 2019, Reuters reported. Last year, e-commerce giant raised $4.5 billion while games developer NetEase raised $3.1 billion.