Report: Baidu plans to apply for a dual primary listing in Hong Kong to open up access channels for mainland investors

Baidu is considering upgrading its current secondary listing status in Hong Kong to a dual primary listing.

On January 14, Bloomberg cited informed sources that discussions have accelerated as Baidu plans to advance the listing of its subsidiary Kunlun Core, which is engaged in data center and artificial intelligence chip businesses.

This move aims to attract more capital inflow from mainland investors. Baidu is currently listed on NASDAQ and simultaneously conducts a secondary listing in Hong Kong. However, the current secondary listing status does not meet the inclusion criteria for the Stock Connect program, preventing mainland investors from investing in Baidu through this mechanism.

Stock Connect Qualification as a Key Driving Factor

If upgraded to a "dual primary listing," Baidu is expected to gain access to the Stock Connect program, thereby directly reaching the vast mainland investor market. However, mainland companies must also meet specific regulatory requirements regarding shareholding structure (such as weighted voting rights arrangements) when applying for inclusion in the Stock Connect program.

A "dual primary listing" means that the company must comply with the listing rules of both markets, including information disclosure, financial reporting, and corporate governance requirements. Stocks in both markets are listed independently, and delisting from one exchange does not automatically terminate the listing status in the other, providing the company with additional risk buffering in the current geopolitical environment.

However, choosing a "dual primary listing" also means higher compliance costs, including stricter disclosure obligations and increased administrative and financial expenditures. This decision requires a trade-off between expanding the investor base and bearing additional listing costs.

Rising Attractiveness of the Hong Kong Market

The Hong Kong stock market has recently performed strongly, with the Hang Seng Index rising approximately 40% over the past year, attracting a large number of companies to conduct stock offerings worth billions of dollars in Hong Kong. For example, AI chip design company Biren Technology saw its stock price increase by nearly 100% within just two weeks of its listing in Hong Kong.

Meanwhile, Baidu's American Depositary Receipts (ADR) have risen about 90% over the past 12 months, significantly outperforming the 21% increase of the NASDAQ Golden Dragon China Index during the same period. This strong market performance creates favorable conditions for Baidu to further expand its presence in the Hong Kong capital market