By Jiahui Huang and Tracy Qu

Baidu's shares rose by their most in more than a year, with analysts citing growing expectations that the technology giant's autonomous-driving business is in pole position to benefit from China's drive to bring robotaxis onto the streets.

Shares closed 10% higher at 95.05 Hong Kong dollars (US$12.17) on Wednesday, notching their biggest one-day gain since March 2023. Its U.S. ADRs rose 8.5% overnight.

Analysts attributed the rise to a growing belief that Baidu's Apollo Go, one of the leaders in China's nascent robotaxi industry, stands to benefit following a flurry of policy developments. In recent days, local media has been circulating a draft of legal regulations on autonomous driving from a city agency in Beijing that analysts said could set the stage for wider use of robotaxis.

Angus Chan, an auto analyst at Bocom International, said Beijing's proposed guidelines "fit with market expectations that the government may further support applications of auto-driving cars for commercial uses."

Baidu, as one of the leading companies in autonomous driving in China, will likely benefit from policy support thanks to the sizable scale of its continuing robotaxi trials in a dozen cities, he said.

One much-cited report came overnight from Guotai Junan analysts Li Muhua and Li Bolun, who suggested that Baidu's robotaxi business will likely break even this year in Wuhan, Baidu's biggest robotaxi testing center, and turn a profit in 2025 thanks to lower operational costs per unit with rising volume and emerging economics of scale.

Baidu didn't immediately respond to a query from Dow Jones Newswires.

Baidu's autonomous-driving operations are a fraction of the size of the broader company, best known for its internet-search expertise and one of China's most-used artificial-intelligence chatbots.

Nomura head of China internet research Jialong Shi cautioned that the auto-driving business wouldn't be a top-line driver in the next few quarters, while Zephirin Group analyst Lenny Zephirin said the segment was too small "to make any impact to the bottom line."

The signs of policy support for robotaxis boosted stocks across the auto-driving sector Wednesday, with more than a dozen companies rising by their daily trading limit on Chinese exchanges.

Write to Jiahui Huang at and Tracy Qu at

(END) Dow Jones Newswires

07-10-24 0728ET