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<Research>JPM Expects Baidu (BIDU.US) Kunlunxin Spin-off/ Separate Listing to Be Key Catalyst This Year; Rating Overweight
Recommend 17 Positive 27 Negative 8 |
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BIDU-SW (09888.HK) disclosed progress regarding the spin-off and separate listing of Kunlunxin on HKEX, according to JPMorgan's research report. BIDU-SW stated that it has submitted the necessary proposal according to the required proposal under HKEX Practice Note 15, and HKEX has confirmed that BIDU-SW 'can proceed' with the spin-off process. BIDU-SW emphasized that Kunlunxin is a non-wholly owned subsidiary and is expected to remain a subsidiary after the spin-off, meaning BIDU-SW will retain control unless the final structure is otherwise arranged. On the other hand, JPMorgan considered HORIZONROBOT-W (09660.HK) to be more relevant in terms of valuation framework and multiples for global investors. By applying HORIZONROBOT-W's current market consensus 2026 EV to revenue multiple to the broker's Kunlunxin 2026 revenue estimate, Kunlunxin's valuation could reach US$17 billion. Compared to BIDU-SW's current market capitalization of approx. US$53 billion, JPMorgan believed that Kunlunxin's separate listing will be a key catalyst this year. Therefore, based on the following SOTP valuation method, the broker rated BIDU-SW's US stock at Overweight, with a target price of US$188. AASTOCKS Financial News Website: www.aastocks.com |
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