Analysis of Valuation Impact from Baidu's Spin-off of Kunlun Chip for IPO

Based on the latest market data and multi-source information analysis, Baidu’s spin-off of Kunlun Chip for independent IPO has had a significant positive impact on its valuation. Here is a detailed analysis:

[1]:

• On January 2, 2026, Baidu Group’s stock closed at HK$143.8, with an increase of 9.35%
• Intraday it once touched HK$144.1 per share
• Total market capitalization rose to approximately HK$395.5 billion

This nearly 10% single-day increase is the market’s direct response to the logic of “unlocking hidden asset value” [1].

[2]:

• Valuation at the first independent financing round in 2021: RMB 13 billion
• Valuation after the latest Series D financing in July 2025: RMB 21 billion (approximately US$2.97 billion)

[3]:

• Kunlun Chip’s revenue is expected to surge from approximately RMB 1.3 billion in 2025 to RMB 8.3 billion in 2026
• If estimated based on the average price-to-sales ratio (PS) of 10x for tech stocks, its valuation is expected to exceed RMB 80 billion

• Baidu (China) Co., Ltd. holds 59.45% equity in Kunlun Chip [2]
• Based on the RMB 21 billion valuation, the value of Baidu’s shareholding is approximately RMB 12.5 billion
• If Kunlun Chip’s valuation reaches RMB 80 billion, the value of Baidu’s shareholding will increase to approximately RMB 47.6 billion

Before the spin-off, as an internal department of Baidu, Kunlun Chip’s true value was hidden in the group’s overall business and it was difficult to obtain an independent valuation. After the spin-off:

• Increased Transparency
  : Investors can independently evaluate the value of the AI chip business [4]
• Valuation Reconstruction
  : The market gives a valuation premium to Baidu’s positioning as a “holding-type technology platform” [1]
• Business Clarification
  : Investors can more clearly evaluate the respective performances of the core internet business and AI business units [1]

• The spin-off allows Kunlun Chip to accurately attract investors focused on the AI computing chip field [4]
• Baidu Group can attract long-term investors who are optimistic about its AI ecosystem

• Kunlun Chip’s independent financing capacity is enhanced
• Baidu can allocate financial resources more efficiently [4]
• Management accountability mechanism is strengthened, and corporate governance level is improved [4]

1. Broad Industry Prospects
   : The dual rigid demands of explosive AI computing power needs and domestic substitution drive industry development [2]
2. Rapid Business Growth
   : According to reports, Kunlun Chip’s revenue exceeded RMB 1 billion in 2024 and far exceeded RMB 2 billion in 2025, ranking among the top three domestic AI chips in terms of scale [2]
3. Ecological Synergy Effect
   : While continuing to serve Baidu’s internal AI training needs, Kunlun Chip expands third-party customers as a market-oriented entity [3]

1. Intense Market Competition
   : Needs to compete with companies such as NVIDIA, Huawei Ascend, and Cambricon [1]
2. Profit Model Verification
   : Needs to prove its commercialization implementation capability and long-term profit model to the capital market [1]
3. Valuation Pressure
   : The current capital market’s tolerance for the profit cycle of hard technology enterprises tends to tighten [1]

Baidu’s spin-off of Kunlun Chip for IPO on valuation has a

comprehensive impact:

: The nearly 10% single-day increase in stock price reflects the market’s immediate recognition of hidden asset unlocking; Baidu’s market capitalization increased by approximately HK$34 billion

: If Kunlun Chip successfully goes public and achieves the expected valuation, the value of Baidu’s 59.45% equity will rise significantly, expected to contribute tens of billions of RMB in book value

: The spin-off helps clarify Baidu’s complex business lines, allowing investors to more accurately evaluate the value of each business segment, which may lead to a systematic improvement in the valuation system

This spin-off marks that the AI capabilities of China’s leading technology companies are shifting from an internal enabling technical element to a strategic asset that can be independently priced by the capital market [1]. Success or failure is not only about the reshaping of Baidu’s market capitalization but also will test the market’s confidence in the development path of domestic AI computing power.

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[1] Economic Observer Net - Baidu’s Stock Price Surges Nearly 10% in a Single Day; Kunlun Chip’s Independent IPO Triggers Valuation Reassessment (http://www.eeo.com.cn/2026/0102/776749.shtml)

[2] Securities Star - Big News in the Chip Track! Baidu Spins Off Kunlun Chip for IPO (https://wap.stockstar.com/detail/IG2026010300004069)

[3] East Money - Kunlun Chip Goes Public Independently in Hong Kong; Baidu’s Stock Price Surges Nearly 10% in a Single Day (https://wap.eastmoney.com/a/202601033607711858.html)

[4] Sohu - Kunlun Chip Goes Public Independently in Hong Kong; Baidu’s Stock Price Surges Nearly 10% in a Single Day (https://m.sohu.com/a/972057106_116237)