Baidu to Seek Hong Kong IPO in December 2020, Sources Say
Chinese tech corporation Baidu (BIDU:NASDAQ) is preparing to offer its shares on the Hong Kong Stock Exchange in 2020, industry sources said.On October 21, the company's New York stock closed trading at USD 134.84 apiece, up 3.66% from the end of the previous session.
Baidu Set to Acquire YY's Domestic Business
It is said that Baidu has finished its negotiation to acquire YY’s domestic business. It will be announced officially in November after which the content, technology, and domestic livestreaming team will be under the umbrella of Baidu. However, there is no feedback as yet from Baidu or YY.
For YY, it could be another way to gather cash for its overseas business. Bigo, Hago, and Likee of JOYY have blossomed in many places overseas in the past two years and gradually reduced their independence on Huya. But overseas expansion needs strong and healthy cash flow to support. Therefore, it could be an effective and efficient way for JOYY to get money by selling domestic business which can help JOYY to focus on overseas business
For Baidu, it seems that Baidu can utilize its online traffic to support YY. The problem is how to stabilize the cash flow. However, YY has better profitability compared with Tik Tok and Kuaishou. The daily activities of users of Tik Tok and Kuaishou are nearly 10 times that of YY's domestic business, but the revenue of Tik Tok and Kuaishou is only two or three times that of YY's domestic business – which could explain why Baidu wants to buy YY’s domestic business.
This acquisition could be a perfect business strategy if Baidu is able to integrate YY’s domestic business well with its development plan. Baidu has already had some acquisition cases that are not successful.
Baidu Leads CNY 1.3 Billion Investment in Geely ECARX
Vehicle intelligence technology provider ECARX has announced receipt of a CNY 1.3 million round A financing. The investment was led by Baidu and followed by SIG. ECARX’s estimated value after the financing is now CNY 10+ million.
Invested in by Geely, ECARX is an independent operating subsidiary that focuses on connected vehicles and smart cockpits. Its smart cockpit product matrix includes 5G connectivity, in-vehicle multimedia system, voice assistance, etc. The intelligent vehicle products integrate various sensors with high precision map technologies. ECARX’s customized in-vehicle system for Geely – GKUI – has more than 2.2 million users.
ECARX is also collaborating with tech giants like Alibaba, Huawei, and Baidu, and is now the leading player in vehicle intelligence. After gaining support from Baidu this time, ECARX will have a closer connection with Apollo, which brings ECARX more support in autonomous driving system development.
The round A funding will be mainly used for the R&D of autonomous driving chips, high precision maps, and other autonomous driving technologies. ECARX plans to found an R&D center in Europe to serve the local market. According to CEO Ziyu Shen, ECARX’s goal is to provide autonomous driving chips to Geely before 2024. With a higher R&D budget and more tech giant shareholders, ECARX is expected to be more independent to Geely and will serve more automobile manufacturers with vehicle intelligent platforms.
ECARX Nabs CNY 1.3 Bn from Baidu, Others to Develop Smart Cockpits
ECARX announced on October 26 that it had acquired Series A financing of CNY 1.3 billion. The investment was led by Baidu (BIDU:NASDAQ) and followed by SIG China. Based on the transaction details, the company is now valued at over CNY 10 billion. These financing proceeds will be mainly used for research and development, chip tape- out and global market expansion.
ECARX is teaming up with chip design firms MediaTek (2454:TW) and Arm to develop processors. Specifically, ECARX's E01, E02 chips and driving assistant chips are presented from its teamwork with the two chip designers, respectively, with the startup primarily concentrated on product awareness, user experience and system development.
Collaborating with China's major automakers, such as Geely, the company mostly provides them with intelligent hardware solutions and licenses for in-vehicle devices. It claims to have grown the related revenue by 30% to 40% in the past twelve months year-on-year.
The company was founded in 2016 as Geely Holding Group's independent entity. It focuses on intelligent auto technology such as auto chips, high precision maps, smart cockpits, intellectual driving solutions, big data, and cloud platforms for vehicle networks.
Baidu to Acquire YY.com's Domestic Business, Sources Say
According to Chinese media, Baidu's negotiation to acquire YY.com's domestic business is close to completion. YY.com's overseas business is not within the transaction and continues to operate independently. YY.com declined to comment.
YY.com is a major Chinese video-based social network, a subsidiary of JOYY. JOYY Inc., formerly YY Inc., is a social platform that engages users in real-time online group activities through voice, video and text on personal computers and mobile devices. The company's segments include YY IVAS and others, Huya broadcasting, and 100 Education.
In a corollary to ByteDance's continuous invasion of the search-engine business, Baidu is also constantly showing its ambitions in the short video and live broadcast field. In the first half of 2020, Baidu announced that live broadcast and video would be important directions in 2020. In April, Baidu announced that it would launch an e-commerce live broadcast. In terms of short videos, Song Jian, the former head of the Xigua Video, joined Baidu in early September.
Nowadays, ByteDance’s Douyin, Alibaba’s Taobao live broadcast and Tencent’s Douyu all pose threats to Baidu, indicating that for Baidu, YY, which is relatively independent and has its strength, is undoubtedly a potential alliance target.
In the 1Q 2020, YY Live broadcast continued to occupy the domestic entertainment live broadcast platform's top position with a scale of 41.20 million active users. The number of active users of Huajiao Live, which ranked second, is only 5.52 million.
At the same time, YY.com's domestic business has been somewhat weak due to its focus on overseas markets. In August 2020, JOYY’s Q2 financial report showed that the global monthly active users were 457.1 million, and overseas users accounted for 91%, implying that selling domestic business to Baidu may be a win-win option.
Baidu Plans to List in Hong Kong by the End of the Year
Baidu APP Launches a Shopping Channel, Back to E-commerce Battlefield
The Baidu App has launched a shopping function – which is actually an e-commerce module that Baidu integrate, having repackaged it from the e-commerce platform 'Duxiaodian' where it was launched in 2019. In the past 12 years, Baidu has repeatedly made efforts in the e-commerce sector, but products have failed due to misaligned positioning and lack of differentiated advantages.
Baidu responded that this attempt is meant to further aggregate Baidu's e-commerce resources, cultivate users' new habits of 'search + shopping,' and create a new closed-loop. In terms of smart hardware, Baidu currently has two sales channels, e-commerce platforms and its own websites. However, its products' promotion has always been limited, so Baidu may plan to regain users through e-commerce channels.
On the other hand, Baidu's driverless taxi service has officially opened for testing in Beijing. And the most important infrastructure behind this is mobile payment. Powering the e-commerce business may lead users to Baidu's mobile payment product Du Xiaoman where it may take the fight to Alibaba and Tencent.
Baidu App Launches "Shopping" Channel
Baidu's Self-driving Taxi Service Opens in Beijing
It is reported that Baidu's self-driving taxi Apollo Go is a pre-installed mass-produced model developed by Baidu Apollo and Chinese car manufacturer FAW. It has the first passenger car production line of the domestic L4 autonomous driving.
Currently, users in Beijing can experience the service either through the Baidu Map app or the Apollo Go app.
According to reports, the independent app being launched, 'Apollo GO,' can not only recommend nearby pick-up points for users but also display the user's navigation route to the recommended starting point. It is now available on the app stores of Xiaomi, OPPO, Huawei, Vivo and iOS.
At present, Baidu's self-driving taxis have restrictions on the opening locations, operating hours, and service groups in Beijing. The open areas in Beijing include two districts: Haidian and Yizhuang. The operating hours are 10:00 to 16:00 and passengers must be 18 to 60 years old with safety officers accompanying the car users to ensure driving safety.
According to data from Apollo, the autonomous driving arm of Baidu has a total of more than 150 autonomous driving road test licenses, a test fleet of 500 vehicles, 1800 global smart driving patents, a total test mileage of more than 6 million kilometers, and has transported more than 100,000 passengers.
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