Exclusive-Baidu's Kunlunxin, valued at close to $3 billion, eyes Hong Kong IPO, sources say

Core Viewpoint - Kunlunxin, Baidu's AI chip unit, is planning an IPO in Hong Kong, recently valued at 21 billion yuan ($2.97 billion) after a fundraising round [1][4]. Group 1: IPO Plans and Market Context - The IPO is part of China's strategy to develop domestic semiconductor alternatives amid U.S. export restrictions on advanced chips [2][4]. - Kunlunxin aims to file a listing application with the Hong Kong Stock Exchange as early as Q1 2026, with plans to complete the IPO by early 2027 [3]. - The company raised over 2 billion yuan in its latest funding round, increasing its valuation from 18 billion yuan to 21 billion yuan [3][4]. Group 2: Industry Trends and Competitors - There is a strong market appetite for AI chip stocks, exemplified by Moore Threads' debut on the Shanghai Stock Exchange, which saw its stock price rise more than five times its IPO price [2]. - Other Chinese chip companies, such as MetaX and Biren Technology, are also planning public listings, indicating a trend in the industry [5]. Group 3: Company Performance and Future Expectations - Kunlunxin, founded in 2012, has transitioned from being an internal unit of Baidu to an independently operated company, with Baidu retaining a controlling stake [6]. - The company expects its revenue to exceed 3.5 billion yuan this year and aims to achieve break-even [6]. - In 2024, Kunlunxin reported a net loss of approximately 200 million yuan on revenue of around 2 billion yuan, with expectations that over half of its revenue will come from external sales in 2025 [6][7].