Chinese tech giants Alibaba (BABA) and Baidu (BIDU) are taking part in a $700 million initial public offering (IPO) by Horizon Robotics, a Chinese smart-driving company. With this investment, the companies aim to capitalize on the growing demand for autonomous driving technology.
Horizon looks to sell 1.36 billion shares at a price range of $4.75 to $5.09 each. The company aims for a valuation of up to $6 billion, making it a major listing in Hong Kong for the year.
Horizon plans to allocate nearly 70% of the IPO proceeds for research and development, with the rest allocated for sales and marketing expenses. Goldman Sachs (GS), Morgan Stanley (MS), and China Securities International are among the banks advising Horizon on the IPO.
Horizon IPO Attracts Investors’ Interest
As Horizon prepares for its IPO on the Hong Kong exchange on October 24, it has secured interest from a diverse array of investors. Alibaba, Baidu, and state-owned Beijing Financial Holdings have pledged to buy more than 30% of the shares available in the IPO. This move is designed to bolster investor confidence and attract broader participation in the offering.
Moreover, Intel (INTC), Volkswagen (VWAGY), BYD (BYDDY), and Contemporary Amperex Technology are among the other investors in the IPO.
Is BABA a Buy, Sell, or Hold?
Turning to Wall Street, BABA has a Strong Buy consensus rating based on 16 Buys and three Holds assigned in the last three months. At $123.74, the average Alibaba price target implies 21.5% upside potential. Shares of the company have gained about 34% year-to-date.
What Is the Price Target for BIDU?
Overall, BIDU has a Strong Buy consensus rating based on 11 Buys and three Holds assigned in the last three months. At $128.75, the average Baidu price target implies 37% upside potential. Shares of the company have declined about 21% year-to-date.
