GUANGZHOU, China — Baidu shares rose just below 1% on the open within the firm’s Hong Kong debut Tuesday.

The Chinese language expertise large, which is already listed within the U.S., raised $3.1 billion in the Hong Kong secondary listing. Shares pared these good points throughout morning commerce.

Not like preliminary public choices, secondary listings is probably not greeted with large first-day rallies as shares of the corporate are already buying and selling on one other trade.

The Hong Kong itemizing is an enormous second for Baidu, China’s largest search engine. The corporate has had a tough couple years from mid-2018 and lagged behind rivals reminiscent of Alibaba and Tencent. Baidu failed to maneuver shortly as Chinese users flocked to mobile search and a tough advertising market hurt the business.

However a turnaround, led by CEO Robin Li, has centered on convincing buyers that the expertise large is a frontrunner in synthetic intelligence and autonomous driving in a bid to diversify its income stream past promoting. And that appears to paying off.

In mid-Might 2018, Baidu’s U.S.-listed shares closed at $284.07 a share, a file excessive on the time. However the inventory subsequently fell over 70% to a trough of $83.62 in March 2020 amid the inventory market crash. That was the bottom shut since April 2013.

However because the March 2020 low, shares have rallied over 200%. Baidu shares hit an all time excessive of $354.82 in February.

“I feel EV (electrical autos) is a part of the story. On the similar time, cloud computing, integrating AI, these are all of the areas the place Baidu has been investing in very closely actually since 2014 and we’re simply beginning to see the fruits of these labors,” Brendan Ahern, chief funding officer at KraneShares, informed “Squawk Field Asia” on Tuesday.

Baidu has an autonomous driving system known as Apollo which could be bought to automakers. The corporate started a standalone electric vehicle company in partnership with Chinese carmaker Geely. Baidu can also be testing robotaxis in cities together with in Beijing. And final month, the agency launched a sensible transportation undertaking within the southern Chinese language metropolis of Guangzhou, its largest but.

James Lee, U.S. and China web analyst at Mizuho Securities, has a $350 worth goal on Baidu’s U.S.-listed shares, which is 31% increased than Monday’s closing worth on Wall Road. He mentioned that the autonomous driving enterprise might be valued at $40 billion and that the Chinese language authorities will proceed to help this business with favorable insurance policies. Lee additionally mentioned he expects Baidu’s promoting enterprise to proceed to realize momentum within the first quarter of this yr.

“We do like the basics of the corporate and we proceed to anticipate the Baidu shares will outperform the market,” Lee informed “Road Indicators Asia” on Tuesday.

In the meantime, Baidu has been trying to additional diversify its income streams. The corporate has raised money for its Kunlun artificial intelligence semiconductor unit which is valued at $2 billion.