Along with a number of other Chinese tech names, Baidu shares have seen some pressure since March on regulatory concerns. Despite that, we believe the company has attractive long-term potential given some major advancements it has made in artificial intelligence and commercialising key technology.

US regulators have been pressuring Chinese companies on a mix of issues from adherence to US auditing practices to links to Chinese national defence. The latter led to the virtual delisting of China Mobile recently due to US national concerns. The former (audit concerns) is more relevant to Baidu following the Holding Foreign Companies Accountable Act on compliance with US auditing standards. Baidu is also feeling regulatory creep with the Chinese government expanding its oversight of larger tech companies.