(Yicai Global) March 10 -- Baidu’s shares surged after the Chinese internet services giant and artificial intelligence company won approval from the Hong Kong Stock Exchange for its secondary listing plans.

Baidu [NASDAQ: BIDU] closed 13.6 percent higher yesterday at USD264.28. In after-hours trading, the stock was up 0.8 percent as of 7.59 p.m. local time in New York.

The Beijing-based company has passed the Hong Kong Stock Exchange’s listing hearing, the bourse said in a document published yesterday. Baidu will use the funds raised to commercialize its intelligent driving and smart cloud computing solutions, as well as invest in AI chips, and attract talent, according to the document.

Baidu will sell new shares, making up from 5 percent to 9 percent of its outstanding total after the listing, to raise at least USD3.5 billion, according to earlier news reports. The issuance is expected to be completed this month.

More than 10 other US-listed Chinese tech firms, inducing Bilibili, Sina Weibo, Trip.Com Group, and Tencent Music Entertainment Group, are also reported to be considering secondary listings in Hong Kong to get closer to investors near their user bases.

Last week, Baidu approved a stock split which was interpreted as a sign of its approaching secondary listing. Each of the firm’s American depositary shares will represent eight Class A ordinary shares, compared with 10 ADSs representing one ordinary share now. Alibaba Group Holding also split its stock before its secondary listing in November 2019.

After the stock split, the pricing of Baidu’s US and Hong Kong equity is expected to be in the same range, lowering the threshold for potential investors and making it easier for them to assess the pricing in both markets.

Founder and Chairman Robin Li has 17 percent of Baidu's shares and 57 percent of the voting rights. 

Baidu has chosen BofA Securities, Citic Group, and Goldman Sachs Group as its co-sponsors for the upcoming share sale in Hong Kong.

Editor: Emmi Laine, Xiao Yi