Sou Hu Cai Jing·2026-01-04 03:28Core Viewpoint - Baidu Group announced the submission of a listing application for Kunlun Core to the Hong Kong Stock Exchange, aiming for a spin-off that will enhance operational and financial transparency, allowing investors to better assess Kunlun Core's performance and potential [2]. Group 1: Spin-off Details - Kunlun Core, a non-wholly owned subsidiary of Baidu, plans to conduct a global offering that includes a public offering in Hong Kong and a placement to institutional and professional investors [2]. - The spin-off is expected to maintain Kunlun Core as a subsidiary of Baidu post-listing, benefiting both companies [2]. Group 2: Business and Financial Implications - The spin-off will allow for a clearer reflection of Kunlun Core's value based on its strengths, attracting investors focused on AI computing chips and related hardware and software systems [2]. - Kunlun Core's business model is distinct from Baidu's more diversified operations, which is anticipated to enhance its market image and negotiation power with clients and suppliers [2]. - The company aims to independently access equity and debt capital markets in the future, improving financial resource allocation for Baidu [2]. Group 3: Financial Performance and Projections - Kunlun Core's valuation increased by 61.5% over four years, reaching approximately 29.7 billion USD after a recent funding round [3][4]. - The company reported revenues of 2 billion RMB with a net loss of 200 million RMB for 2024, with expectations to break even in 2025 with revenues exceeding 3.5 billion RMB [4]. - Morgan Stanley forecasts that Kunlun Core's revenue will surge to 8.3 billion RMB in 2026, representing a sixfold increase [4].