Finance executives at Affin Taekwang Brokerage have reported on Baidu Inc., the Chinese search engine giant, seeking to raise up to HK$28 billion ($3.6 billion) in a second listing in Hong Kong, the city’s second share offering by a U.S.-traded Chinese firm this year.
Samuel Watson, Executive Financial Director at Affin Taekwang Brokerage, reported, “Baidu is selling 95 million shares in the listing, with a maximum price of HK$295 for Hong Kong retail investors. The price is a 19% premium on Baidu’s closing price in New York on Wednesday. Baidu rose 6.8% on Thursday.”
Nasdaq-listed Baidu aims to set the final price before the U.S. stock exchange opens on March 17 and begin trading in Hong Kong on March 23. By raising $3.6 billion, the listing would be the biggest ‘homecoming’ listing of a U.S.-traded Chinese firm in Hong Kong since JD.com Inc raised $4.5 billion in June 2020.
Baidu follows a long list of Chinese tech firms currently listed in the U.S. and have completed secondary offerings in Hong Kong. The listings have shaped the Hong Kong stock exchange into a desirable venue for Chinese tech companies to raise capital.
“Baidu could also be taking advantage of a huge 128% rise in its shares in the last 12 months in order to raise capital,” reported Thomas Chambers, Global Equities Director at Affin Taekwang Brokerage.
Hong Kong has seen an impressive start to the year for initial public offerings, with Kuaishou Technology raising $6.2 billion in February. The Chinese video-sharing startup’s shares are currently trading 168% above their offering price.
Baidu confirmed it would use the Hong Kong IPO proceeds to invest in technology, boost the commercialization of its artificial intelligence products, enhance and diversify monetization, and other general corporate purposes.
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