Baidu NASDAQ:BIDU, a Chinese artificial intelligence developer and internet search leader, plans to pursue a dual-primary listing in the United States and Hong Kong, potentially opening its shares to investors in mainland China. The company intends to upgrade its existing Hong Kong secondary listing to primary status while maintaining its Nasdaq listing. Baidu's U.S.-listed shares gained as much as 3.2% in premarket trading following the announcement. The upgrade could allow Baidu to qualify for Stock Connect, the cross-border trading program linking Hong Kong with the Shanghai and Shenzhen exchanges, expanding the company's access to mainland investment flows.
Baidu is following NetEase NASDAQ:NTES, a company that disclosed plans in March to convert its Hong Kong listing to dual-primary status, after which its shares gained more than 15%. Baidu currently has a primary Nasdaq listing and a secondary listing in Hong Kong, giving it access to investors across Asia but not directly to mainland Chinese investors through Stock Connect. The proposed conversion could broaden Baidu's investor base as the company seeks additional capital to fund artificial intelligence development and compete with Alibaba Group Holding NYSE:BABA, one of its major rivals, and DeepSeek, an aggressive competitor in the AI industry. Baidu's AI chip unit has also hired banks for a potential Hong Kong initial public offering that may raise as much as $2 billion, according to people familiar with the matter.
The dual-primary structure may also help Baidu reduce its exposure to potentially unfavorable U.S. policies, according to people familiar with the matter cited in January. Alibaba completed a similar Hong Kong listing upgrade in 2024 after tensions between the United States and China increased concerns about possible U.S. delistings. Investors may view Baidu's plan as an effort to diversify its sources of capital and strengthen its access to Chinese investors, although the structure comes with stricter reporting obligations and higher administrative expenses. Mainland Chinese companies must also satisfy requirements involving weighted voting rights before becoming eligible for Stock Connect.