Shares of Baidu Inc. advanced in Hong Kong, following a surge overnight in U.S.-listed ADRs on news that BlackRock Inc. raised its stake in the Chinese internet-search giant.
rose as much as 7.9% Thursday in the Asian financial hub, hours after the company’s ADRs
closed 13% higher at US$152.25 in the U.S. The Hong Kong-listed shares outperformed a 0.4% rise in the city’s broader Hang Seng Index and a 1.7% gain in the Hang Seng Tech Index.
New York-based BlackRock, the world’s largest asset manager, said in filings that it had raised its stake in Baidu to 6.6% at end of 2022, up from 5.4% a year earlier.
Baidu shares have gained 13% this week–and 38% this year–helped also by rising sentiment for technology stocks globally and recent media reports that the company plans to commercialize its artificial-intelligence-powered chatbot, similar to OpenAI’s popular ChatGPT, and integrate the technology into its main search engine in March. The company hasn’t confirmed those reports.
Several analysts have raised price targets for Baidu in recent days.
Citi analysts on Wednesday lowered their 2022-2024 earnings estimates due to a disrupted fourth quarter and slower recovery for the advertising and cloud segments in the first quarter of 2023, but they kept a buy rating and raised their target on ADRs to US$176 from US$166 as they rolled the target forward to reflect 2024 forecasts.
“Looking beyond short-term uncertainty, we believe Baidu remains a proxy for a China SME ad budget recovery play, along with the demand rebound for travel, local services, franchising, healthcare, and other verticals,” they said in a note.
Nomura on Tuesday remained neutral on Baidu ADRs but raised its target to US$138 from US$108, partly due to its higher valuation for the company’s core ads business amid China’s economic reopening.
Baidu shares were recently 6.9% higher at 154.30 Hong Kong dollars (US$19.67).
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