(Yicai Global) March 23 -- Shares in Chinese internet giant Baidu closed at their issue price of HKD252 (USD32.45) today after an underwhelming first day of trading on the Hong Kong Stock Exchange, despite nudging up 1.8 percent earlier in the day.

Nevertheless, the Beijing-based firm, which listed as an artificial intelligence entity rather than a tech giant, attained its target of raising HKD23.94 billion (USD3.1 billion) in the secondary listing. The sale of its shares [HKG:9888] have boosted its market valuation to HKD720 billion (USD92.7 billion).

The funds will be used on research and development, to further develop Baidu’s mobile ecosystem, commercialize its artificial intelligence products and smart cloud solutions as well as supplement working capital, it said in its listing prospectus.

Baidu, best known for its omnipresent search engine, has been making strong inroads into AI in recent years, leveraging its powerful internet foundation to become a market leader in cloud services, autonomous driving, smart transportation and other AI applications.

“As a company, we believe in technology,” Chairman and Chief Executive Officer Robin Li, who holds a 17 percent stake in the firm and 57 percent voting rights, said today.

“Only by maintaining continuous investment in technological innovation can we seize the huge market opportunities in smart transportation, autonomous driving and other AI-related fields,” he added. Last year, Baidu spent CNY19.5 billion (USD2.99 billion) on R&D, up 6.6 percent from the year before.

Baidu has good profitability compared with a number of overseas-listed Chinese stocks that turn to Hong Kong for a secondary listing, Li Hengzhao, international analyst at Guotai Junan Securities, told Yicai Global earlier.

It logged a 21 percent gain in net profit last year from 2019 to CNY22 billion (USD3.4 billion) on revenue of CNY107.1 billion (USD16.4 billion), similar to the year before, according to its latest financial report.

Baidu’s New York shares [NASDAQ:BIDU] closed up 3.36 percent at USD266.13 yesterday.

Editor: Kim Taylor