(Yicai) March 31 -- IQiyi's shares rose after the Chinese video platform said it has submitted a confidential application for a secondary listing of shares in Hong Kong 

IQiyi [Nasdaq: IQ] closed 5.8 percent higher at USD1.27 in New York yesterday. The stock has plunged 34 percent since the end of last year.

The secondary listing aims to enhance iQiyi's access to Hong Kong's capital market, broaden its investor base in Asia, and strengthen its global profile, the Beijing-based company announced late yesterday.

The move remains subject to approval from the Hong Kong Stock Exchange and completion of filing with the China Securities Regulatory Commission, iQiyi noted, adding that details have not been finalized.

IQiyi's secondary listing is probably to revitalize its existing assets and broaden its financing channels, Shen Meng, director of Xiangsong Capital, told Yicai. The firm ended in the red last year, so the move may help its parent company, tech giant Baidu, relieve the financial pressure to some extent, Shen noted.

Net loss based on generally accepted accounting principles was USD29.2 million last year, compared with a net profit of USD109 million the previous year, iQiyi said in its annual financial report last month. Revenue dropped 7 percent to USD3.9 billion due to declining income from paid memberships and advertising.

The iQiyi HKSE application was the third done in secret by a Baidu-backed company since the start of the year. The tech giant's artificial intelligence chip subsidiary Kunlunxin filed in early January, while BioMap, a life sciences AI model firm set up by Robin Li, founder, chairman, and chief executive officer of Baidu, reportedly submitted an application in the middle of this month.

AI hardware platforms have a huge demand for capital investment, with both the research and development of underlying chips and AI-driven pharmaceuticals generally acknowledged as capital-consuming businesses, Shen said, noting that the listing of Kunlunxin and BioMap will also help Baidu ease its financial pressure.

Kunlunxin and BioMap have not reported financial data, but AI chip rivals Moore Threads Technology and MetaX Integrated Circuits, as well as AI drug development peer Insilico Medicine Cayman, are in the red, Shen stressed.

The three listings also show Baidu's capture of the "policy dividend" of the Hong Kong stock market, Shen noted. The initial public offering market in the city has continued to heat up this year, with the total amount of IPO proceeds exceeding HKD100 billion (USD12.76 billion) so far, Shen said.

With AI chip businesses being at the valuation peak of the supply chain, the spin-off listing of Kunlunxin can enable Baidu to rely on the capital market to inject funds into the unit, Shen pointed out. A series of reforms by the HKSE in recent years has also provided greater flexibility for the listing application process of Baidu-backed companies, Shen added.

Li aims to enter the new AI-driven drug development area via BioMap. In the early stages of the company, he directly and indirectly held about 40 percent of it.

However, the domestic operating entity of BioMap underwent a business registration change last September, leading to Li and related Baidu entities exiting the direct shareholder list, with Li remaining as the actual controller, according to business data platform Tianyancha. The move was likely an equity structure optimization done for the Hong Kong listing, experts said.

Editors: Tang Shihua, Martin Kadiev