Baidu's Kunlun Chips Initiates Listing Plans in Shanghai and Hong Kong

Baidu's chip company Kunlun Core is advancing dual listings in Shanghai and Hong Kong. According to regulatory filings disclosed last Friday, CICC has submitted a listing application for the STAR Market to the China Securities Regulatory Commission.

This January, Baidu stated in exchange documents that the company planned to spin off Kunlun Core and had confidentially submitted papers for the subsidiary's listing in Hong Kong; after the spin-off, Kunlun Core would still be a subsidiary of Baidu. In terms of equity structure, Baidu holds 57.67% of Kunlun Core through a Chinese entity. Kunlun Core completed a round of financing in December last year, with the company's valuation reaching up to 3 billion USD.

Jefferies said in a report issued last Friday that dual listings can "more accurately reflect the value of Kunlun Core and enhance its operational and financial transparency," also allowing the company to independently access equity and debt markets. The report estimates that Kunlun Core's listing in Hong Kong will take place in the third quarter of this year.

Regarding the enthusiasm for A-share listings, Jefferies wrote in the report:

“Over the past few months, several model and chip companies have sought A-share listings. We believe this is due to valuations, as well as being closer to domestic investors.”

The financing fever for China's AI-related companies continues. Nikkei Asia reported that despite the disruptions to some companies' post-IPO performance due to the Iran war, and a decline in the Hang Seng Technology Index, Hong Kong's IPO pipeline remains robust.

AI computing company Xingzhi Technology saw its stock price increase over fivefold in its Hong Kong IPO Tuesday last week, with the public offering portion being subscribed over 57,000 times ; the Shanghai STAR 50 Index hit a historical high on Thursday, with a year-to-date increase of more than 20%.