(May 8): Baidu Inc’s chip unit Kunlunxin is planning an initial public offering (IPO) on Shanghai’s Nasdaq-style bourse in addition to a separate listing plan in Hong Kong, as the Chinese search engine giant looks to taps investor appetite for semiconductor stocks.
The chipmaking unit is seeking an IPO on Shanghai’s STAR Board and is working with China International Capital Corp, according to a statement filed by the investment bank to the Chinese Securities Regulatory Commission. Earlier this year, Baidu said Kunlunxin had confidentially filed for an offering in Hong Kong. Baidu’s stock in Hong Kong jumped as much as 4.1% on Friday.
Investor interests in China’s homegrown chipmakers is unabated. The shares of companies including Shanghai Biren Technology Co, Metax Integrated Circuits Shanghai Co and Moore Threads Technology Co have surged since debuts last year. Kunlunxin, which Baidu holds a 58% stake in, is valued at at least US$3 billion, Bloomberg reported in December. Shanghai’s tech-heavy Star 50 Index has surged more than 20% this year and reached an all-time high on Thursday.
Pursing a listing in Shanghai shows progress in Baidu’s plan to carve out Kunlunxin, as the onshore listing makes it easier for Chinese AI model developers and chipmakers to access to domestic investors, Jefferies analysts including Thomas Chong said in a note on Friday. It expects Kunlunxin’s Hong Kong listing to happen in the third quarter.
Chinese up-and-coming tech companies, including chipmakers and firms across the AI ecosystem, have brought a wave of IPOs to the market both in Hong Kong and onshore over the past year. Their fundraising is part of Beijing’s efforts to nurture local semiconductor champions in the face of US restrictions over advanced chips made by the likes of Nvidia Corp. Baidu’s rival Alibaba is also said to plan a listing of its chipmaking arm.
Baidu started the chipmaking business years ago to provide computing power for its AI ambitions. It said earlier this year that carving out the unit for a separate listing would raise its profile and tap the capital markets for additional funding.
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China’s leading AI developers including DeepSeek and ByteDance have released updated models recently, fuelling demand for domestic chips from suppliers including Huawei Technologies Co and Cambricon Technologies Corp for massive inference needs.
Domestic chipmakers disclosed surging revenue earlier this year, igniting a fresh rally and boosting investor confidence that demand for local chips remains robust.
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