Baidu’s Hong Kong shares (9888.HK) took a significant hit on Monday, losing $2.4 billion in market value, after the company’s founder was absent from a rare meeting between President Xi Jinping and corporate leaders. The meeting is seen as a signal that China is shifting toward a more business-friendly approach following years of regulatory crackdowns that hurt the fortunes of its tech giants. Investors closely examined photos and footage from the event for clues about which top executives were present. According to a Reuters source, the founders of two major Chinese tech firms—ByteDance, the parent company of TikTok, and Baidu, known for its search engine and AI technology—were notably absent.
Investors were also concerned that Baidu’s PR chief, Qu Jing, might be leaving the company. Qu, whose Baidu biography describes her as “a graduate of China Foreign Affairs University with extensive work experience in journalism and public affairs,” has drawn criticism from the internet for posting a series of videos mocking her co-workers’ social media use. She also caused controversy in 2023 with a video in which she smacks a small paper figure bearing the letters SCMP, widely understood to refer to the South China Morning Post, owned by Alibaba’s parent firm.
On Monday, Baidu issued an apology letter for the videos and said that Qu, who was not at the meeting in Beijing, did not have the authority to represent the company on such matters. Qu did not respond to a request for comment.
Analysts cited various reasons for the share slide, with some speculating that Baidu had cut its exposure to the quantum computing race because of poor results and a lack of investment returns. Others pointed to speculation that the company could be moving to focus on other high-growth businesses, such as smart speakers.
The China-based company is a major provider of smart speakers, and the iQIYI brand is one of the world’s largest. However, sales growth has been sluggish, and the company has struggled to make a profit in the sector.
Baidu’s latest quarterly earnings report showed better-than-expected profits and sales, but investors were still skeptical about the company’s prospects. Its cloud services and autonomous driving investments are among the key growth areas, but both have been slow to pick up. The company is also competing with global rivals such as Google, which is accelerating its investments in self-driving cars.
The sluggish performance may be partly due to the weakening economy and rising labor costs, which have led to higher input prices for technology companies. But it also reflects that many of its core markets are becoming saturated, said analysts. Nonetheless, they expect the company to see better growth this year than last. They added that the iQIYI unit will be a strong driver.
