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<Research>Nomura Elevates Baidu (BIDU.US) TP to US$178 Amid Kunlunxin IPO Filing/ Div. Forecast
Recommend 5 Positive 7 Negative 1 |
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BIDU-SW (09888.HK) announced last Friday (2nd) that its chip subsidiary, Kunlunxin (KLX), has confidentially submitted an IPO application to the Hong Kong Stock Exchange, Nomura released a research report saying. However, the timeline for completing the IPO has not been disclosed. Nomura estimated that Kunlunxin will complete its listing in 1H26. The broker valued Kunlunxin at US$32 billion, equivalent to about 40% of CAMBRICON (688256.SH), corresponding to a projected 19x PS ratio for Kunlunxin in 2027, compared to the market's 24x valuation for CAMBRICON. Nomura mentioned that BIDU-SW has proposed distributing cash to shareholders in several instances, apart from conducting buybacks, to attract long-term investors who value returns. Nomura believed that completing Kunlunxin's IPO might be an ideal time for BIDU-SW to distribute cash dividends, supported by the proceeds from the partial reduction of its 69% stake in Kunlunxin. Therefore, the broker kept rating at Buy on BIDU-SW's US stock, and elevated its target price from US$140 to US$178, due to its higher valuation for Kunlunxin and improved capital return prospects, removing a 30% discount on its US$22 billion cash. AASTOCKS Financial News Website: www.aastocks.com |
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