Kunlunxin IPO Valuation Projected to Exceed Rivals
Daiwa forecasts that the upcoming initial public offering of Baidu's AI chip unit, Kunlunxin, will achieve a valuation surpassing its competitors. The investment bank's confidence stems from Kunlunxin's larger revenue scale and superior profitability. A significant portion of the subsidiary's revenue originates from external customers, demonstrating market validation for its technology. Key clients include industry giant Tencent and a large telecommunications operator, underscoring the chip's adoption in critical, high-demand sectors.
Baidu Secures Chip Supply for Next Two Years
Baidu's management has effectively mitigated near-term production risks by securing sufficient chip supply to support Kunlunxin's development for the next two years. This strategic move addresses investor concerns regarding global semiconductor capacity constraints and provides a stable foundation for growth. The secured supply ensures that the company can continue to meet demand from its major clients and support the expansion of its own AI initiatives without interruption.
Daiwa Reaffirms HKD 175 Target on AI Growth
Reinforcing its positive outlook, Daiwa reiterated its Buy rating on Baidu (BIDU-SW) and maintained a target price of HKD 175. The bank believes Baidu's proficiency in developing high-performance, low-cost lightweight AI models will fuel sustained revenue growth. While the company is expected to maintain a high level of investment in artificial intelligence this year, operational expenses are projected to benefit from employee optimizations carried out at the end of last year. Future catalysts for the stock include the formal listing of Kunlunxin and forthcoming details on its 2026 dividend plan.
Edgen Stock·Mar 04 2026, 04:45
