Baidu set to raise US$3.1 billion in Hong Kong secondary listing at HK$252 per share

Chinese artificial intelligence and search engine giant prices Hong Kong secondary listing at HK$252, below the maximum price sought, company says
Baidu is the second US-listed Chinese tech firm to list in Hong Kong this year after Autohome

Baidu

Georgina Lee

Published: 7:00pm, 17 Mar 2021

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Chinese search engine and artificial intelligence giant Baidu is set to raise US$3.08 billion (HK$23.9 billion) after pricing its Hong Kong secondary listing at HK$252 per share, the company said.

The offer price represents a 3 per cent discount to its Nasdaq closing price of US$266.78 on Tuesday. Baidu had originally sought to sell each share at up to HK$295, which would work out to US$304 if converted into an American depositary receipt (ADR). Its Nasdaq ADR has traded below that level since February 24. The pricing was reported earlier by Reuters and IFR.

Baidu’s pricing comes amid more lukewarm investors sentiment compared with when short-video platform Kuaishou’s Hong Kong retail tranche priced at the top-end of the marketed range. Tencent-backed Kuaishou’s bumper IPO raised over US$6 billion, the city’s biggest deal since Alibaba’s US$13 billion IPO in November 2019.

A Baidu spokeswoman declined to comment on pricing, saying that an announcement is pending.

Chinese search engine giant Baidu will start trading in Hong Kong after its US$3 billion share sale. Photo: Bloomberg

Earlier this month, a share sale by Nasdaq-listed Chinese online car-selling platform, Autohome, raised US$688 million, about one-third short of its maximum offer target.

The Hang Seng has dropped 7 per cent from its 32-month high of 31,084 hit on February 17. Waning investor appetite could pose a challenge to other US-listed Chinese tech companies poised to launch deals this month, which include video-streaming platform Bilibili.

Baidu is selling 95 million shares, or about 3.4 per cent of its share capital. There is an overallotment option to sell up to 14.3 million more shares.

Listing on the main board is scheduled for March 23, it will trade under stock code “9888”.

Baidu’s share sale added to the 26 IPOs that were completed year-to-date, which have raised US$10.8 billion, five times higher than the volume during the same period a year ago, data from Refinitiv shows.

The Beijing-based company said last week that its international placing tranche, which accounts for 95 per cent of the global offering, could be priced higher than the HK$295 top-end it had committed to retail investors. Still, the final price was contingent on its US stock performance, and investors’ demand, it added.

The city’s biggest two deals last year launched by JD.com and NetEase, were on average priced at a tight 1 to 5 per cent discount to their previous-day ADR closing prices.

The internet giant plans to use part of the proceeds from the share sale to invest in its AI technology, including its AI cloud solutions, and autonomous driving platform called Apollo.

Bank of America, Citic Securities, Goldman Sachs are the joint sponsors and global coordinators of the deal.

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