Key Takeaways:
Baidu's conversion to dual-primary HKEX listing unlocks Stock Connect eligibility, potentially channeling billions in southbound capital to the AI company's shares.
Baidu Inc. received Hong Kong stock exchange confirmation for its voluntary conversion to dual-primary listing, a move that positions the company for Stock Connect inclusion by year-end.
"Baidu's capital adjustments and industrial actions in 2026 aim to fully realize the value of its complete AI industrial chain covering chips, framework, large models and applications," Zhang Yi, chief executive officer at Guangzhou iiMedia Research Co., said.
The conversion, authorized by Baidu's board on July 16 and acknowledged by HKEX on July 22, removes the "S" suffix from the company's stock code 09888.HK. Baidu originally listed in Hong Kong on March 23, 2021, under the secondary listing model. After the change, both the Hong Kong Stock Exchange and Nasdaq will serve as primary listing venues, with American depositary shares and Hong Kong shares remaining interchangeable.
The upgrade unlocks Stock Connect eligibility, giving mainland Chinese investors direct access to Baidu shares for the first time. The company's Hong Kong-traded stock closed at about HK$106 on July 21, valuing the company at roughly HK$289 billion. Alibaba Group, JD.com and Bilibili have already completed similar conversions, establishing a precedent that Baidu is now following.
AI Revenue Crosses 50% Threshold as Capital Structure Shifts
The listing conversion coincides with a strategic inflection point in Baidu's business. AI-related revenue accounted for 52% of core business revenue in the first quarter of 2026, crossing the 50% threshold for the first time. Intelligent cloud infrastructure revenue reached 8.8 billion yuan, up 79% from a year earlier, while self-developed GPU cloud revenue surged 184% year-on-year.
The company is also advancing its AI chip subsidiary Kunlunxin toward a dual A+H IPO. Kunlunxin submitted a confidential listing application to HKEX in January 2026 and completed its Science and Technology Innovation Board counseling filing in May, with Baidu maintaining its controlling stake.
Stock Connect Access Could Reshape Valuation Debate
Baidu's current valuation reflects the market's uncertainty about how to price the company's AI growth story against its traditional search business. The stock trades at about 194 times trailing earnings, a multiple that partly reflects recent profit volatility. Inclusion in Stock Connect would expose the stock to mainland institutional investors who may assign a higher premium to Baidu's full-stack AI narrative, mirroring the valuation dynamics seen after Alibaba's dual-primary conversion.
The price gap between Baidu's US-listed ADRs and Hong Kong shares remains narrow. On July 21, the ADR converted to about HK$108, a roughly 2% premium to the Hong Kong stock, meaning the arbitrage mechanism should remain smooth after the conversion.
For Baidu, the conversion adds a layer of regulatory hedging. If extreme scenarios arise on the Nasdaq side, the Hong Kong listing entity will continue to exist independently — a structure that gives institutional investors protection against single-market policy risk.
This article is for informational purposes only and does not constitute investment advice.
