Its pass means that it has occupied the positions of several companies.
After all, with the return of such a large technology company, the financial pressure on A-shares is still relatively large. Just as it was said before in the market that “Ali crosses the border and nothing is left in the grass”, this is enough to show the strong ability of these Internet giants to attract money.
This is the case. It is not easy and cost-effective for Baidu to list A shares in the short term.
On the other hand, the Hong Kong Stock Exchange is an international financial trading center with more transparent information, flexible systems, more sufficient and diversified funding sources, and can shorten the time period required for listing, which is more consistent Baidu’s current needs.
According to Ping An Securities, from the perspective of the primary market, based on the mechanism of Hong Kong stocks, the return of China concept stocks provides more new opportunities for small and medium investors. From the perspective of the secondary market, the return of large, high-quality companies will help improve the structure of the Hong Kong stocks industry and enhance the effectiveness of the Hang Seng Index and the room for income growth.
Get up early, catch an evening episode
Actually, people who follow Baidu know that Baidu’s choice to return to Hong Kong stocks is not a sudden thing.
Fundamentally speaking, it is not completely after the black swan. It has become a follower of the return of Chinese concept stocks with the trend. On the contrary, in the matter of “going home”, Baidu has always been one of the domestic Internet companies. The most positive.
As early as 2018, Robin Li said in an interview, “Back then, it went public in the U.S. because the policy did not allow Baidu’s VIE structure to be a foreign-funded company from Chinese law. When the policy allows Baidu to come back, we definitely hope to be able to come back to the domestic stock market as soon as possible.”
In May of this year, when answering how he viewed the US’s tightening of supervision and review of Chinese listed companies in the United States, Robin Li said frankly: “We are indeed very concerned about the US government’s continuous tightening of this We are constantly discussing what we can do internally. These things include, of course, the secondary listing in Hong Kong and other places.”
The statement made this time is also the first time that Robin Li officially released a signal to go to Hong Kong for a second listing.
Immediately afterwards, Baidu carried out a series of actions in secret. According to Tencent News “Yi Xian”, Baidu started recruiting IR leaders for Hong Kong stocks at the end of June, but until August, no suitable candidate was found for this position. At the same time, in late July, senior executives including Robin Li also met with some investment banks in batches to officially launchMove back to Hong Kong for the second listing plan.
Why did you choose this point in time? People familiar with the matter told Hu Xiu that the current Sino-US trade tensions continue to heat up. At the same time, the US presidential election is approaching. It is not easy to figure out what the new US president will do against Chinese stocks. Companies must prepare in advance for any unexpected results.
In addition, in the context of the reform of the Hong Kong Stock Exchange, Ali’s secondary listing on Hong Kong stocks and the “Luckin Coffee” incident, at the beginning of this year, the return of China’s concept stocks to the secondary listing on the Hong Kong Stock Exchange has become a boom.
It reached a small climax in June this year. For example, on June 11, NetEase was listed on the Hong Kong Stock Exchange; on June 18, JD was officially listed on the Hong Kong Stock Exchange.
In this way, compared to Ali’s quick fight and quick decision in December last year, Netease and JD’s decisive follow-up, now Baidu, which was prepared early in the morning, is still slowly turning a bit passive.
How will Baidu’s valuation change?
As we all know, every company that chooses to return to the country to go public has the same experience, that is, the market value is seriously underestimated, such as Focus and 360.
Regardless of the earnings per share and PE value, or the gap with Google, Baidu’s market value is underestimated is no longer a short-term phenomenon.
The figures show that Baidu’s stocks in related industries are underperforming. In the past six months, the company’s stock has risen by +27.84%, this year’s growth rate is -4.68%, while the industry’s growth rate is 10.6%.
This is not difficult to understand.
Because Baidu only exists as an ordinary Chinese concept stock in the US market, most of them do not know Baidu’s business.
But the consensus among analysts is that Baidu is currently overweight stocks, and no analysts rated the stock as sell. Specifically, 11 out of 39 participants rated it as “hold”, 25 of them suggested to rate it as “buy,” and no one rated the stock as underweight.
So, we can easily find that Baidu is still in a low-value zone.
According to the effect of NetEase and JD.com’s second listing in Hong Kong in June 2020, their market value has increased to varying degrees, which has produced a strong demonstration effect. This experience may also apply to Baidu.
On the one hand, with the US market project, Baidu’s position in the Chinese marketThe environment is very different. Firstly, Baidu is one of the well-known Internet giants in China, and secondly, there are very few decent technology stocks in A-shares, so high-quality technology companies will definitely be sought after when they come back.
On the other hand, although China knows Baidu, many people have doubts.
According to public information, Baidu’s total revenue in the second quarter of this year was 26 billion yuan, a decrease of 1.1% compared to the same period last year. Among them, “Baidu core”, which is the combination of search services and transaction services, total revenue in the second quarter It was 18.9 billion yuan, a decrease of 3% compared with the same period last year.
This is mainly due to the fact that in the search field, Tencent’s acquisition of Sogou, and byte relying on Toutiao’s search to seize Baidu’s market share; in terms of short video, short video platforms such as Kuaishou and Douyin are preemptive, which has had a huge impact on Baidu and is becoming increasingly fierce. Under the market competition, the company’s advertising business has experienced negative growth for five consecutive quarters.
Although Baidu has a layout in the fields of Xiaodu ecology, autonomous driving, AI and other fields, and has achieved small results, it is still not enough to carry the banner of revenue, and even some new businesses are still in a state of continuous loss.
In a blink of an eye, it has been 15 years since Baidu was listed on the Nasdaq on August 5, 2005. I have to admit that Baidu has indeed missed it in these 15 years, and perhaps it is still missing a lot.
Especially in recent years, with the rise of Internet upstarts, Baidu has become the company with the lowest presence and market value among the three BAT companies.
For Baidu at the moment, if it wants to win the turnaround battle, it may only be a shortcut to return to the Hong Kong stocks to obtain financial support and better support the investment in the technical track.
I’m Zhang Xue, the author of this article. I am concerned about 5G, cloud computing, and enterprise services. )