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With the upcoming listing, Baidu will be the biggest US-traded Chinese company in Hong Kong since NetEase Inc.’s offering in June 2020
Chinese leading internet giant Baidu Inc (NASDAQ: BIDU) is planning to conduct a secondary listing in Hong Kong. According to those familiar with the matter, the trading will start on March 23. Notably, pricing the 95 million shares at $32.45 (or HK$252) each, Baidu is looking to raise as much as $3.08 billion in Hong Kong listing.
Baidu declined to comment on the news. But last week, the company released its listing documents saying that it would issue 95,000,000 Class A ordinary shares priced at no more than HK$295 dollars or $38.05. The banks that underwrite the listing also have the option to buy up to 14,250,000 more shares. The joint sponsors of the offering are the Bank of America Corp. (NYSE: BAC), CLSA Ltd., and Goldman Sachs Group Inc (NYSE: GS). Meanwhile, China International Capital Corp., UBS Group AG (NYSE: UBSG), and CCB International Holdings Ltd. are joint global coordinators.
Baidu is the Chinese counterpart of Google LLC (NASDAQ: GOOGL) search engine. With control over 75% of the search market in China, Baidu is the 6th largest search engine in the world. Its range of products includes maps, news, video, encyclopedia, anti-virus, and internet TV.
Launched back in 2000, Baidu became the first Chinese company to be included in the NASDAQ 100 stock market index in December 2007. In October 2018, Baidu became the first Chinese firm to join the US-based computer ethics consortium Partnership on AI.
Hong Kong Exchange to Back Chinese Tech Companies
With the upcoming listing, Baidu will be the biggest US-traded Chinese company in Hong Kong since NetEase Inc.’s offering in June 2020, when it raised HK$24.3 billion. Baidu’s Hong Kong listing also follows tech companies like Alibaba Group (NYSE: BABA) and JD.com (HKG: 9618) that did a secondary listing on the Hong Kong exchange earlier. Chinese video streaming company Bilibili has recently filed for a Hong Kong secondary listing as well.
Notably, Hong Kong is enjoying a boost in the listing volumes, as a growing number of technology firms are starting to trade there. In 2020 alone, there were 12 secondary listings in Hong Kong that raised $19.06 billion in total.
However, some companies face challenges while filing for a listing on the biggest Chinese exchange. In particular, Alibaba-backed financial giant Ant Group that was planning to conduct a dual IPO in Hong Kong and Shanghai had to abandon its ambitious plans. As we reported at that time, Chinese authorities warned the company on restrictions of capital and leverage. As a result of the issues with the authorities, Ant Group suspended the IPO. It also started to look for a “short-term liquidity solution” to help its employees monetize shares.