Investors gave tech conglomerate Baidu’s secondary listing debut in Hong Kong a lukewarm reception – but the internet giant still generated $3.1 billion.
Baidu Inc’s shares closed flat on Tuesday with investors wary of the fundraising flurry in the city and the search company's growth plans.
The downbeat mood towards Chinese technology offerings was reinforced with video site Bilibili raising a lower-than-expected $2.6 billion in its secondary listing.
Baidu shares closed at HK$252 each, in line with the price set for the Hong Kong listing, while the Hang Seng Index lost 1.3% in the session.
It was the weakest debut for a US-listed company debut in Hong Kong since Yum China shares dropped 5.3% in their first session in September after raising $2.2 billion.
But the firm has still more than tripled its valuation from a low in last March, with about half the gains coming in the past three months as Baidu’s interests in AI have finally started to pay off in cloud technology and electric vehicles.
Baidu's lacklustre debut contrasted with some of the city's other major first-day movers in 2021, such as Kuaishou Technology which gained 160% in early February.
LightStream Research analyst Shifara Samsudeen said secondary listing debuts were generally not as strong as primary listings, but noted investors were wary of Baidu's future growth and diversification plans.
"We think it will take a few more quarters for the market to duly appreciate Baidu's efforts in cloud and other initiatives and value the stock as a comprehensive internet stock," Samsudeen said.
Hong Kong has seen $31.4 billion raised through share sales so far this year, compared to $8.6 billion over the same period last year, prompting concerns that the appetite for new deals could be weakening.
"There is too much paper around, the listings have been never ending and companies have raised money so easily without any real need," said one Hong Kong fund manager.
Bilibili finalised its secondary listing on Tuesday, raising a smaller sum than the company's initial target of about $3 billion.
- Reporting by Reuters