SenseTime Group officials pose for a photo during the company's listing at the the Hong Kong Stock Exchange on Dec 30, 2021. (PHOTO PROVIDED TO CHINA DAILY)
The artificial intelligence company SenseTime started trading on the Hong Kong Stock Exchange on Thursday — a development that demonstrates Hong Kong’s attractiveness as a listing destination for Chinese tech companies, brokers said.
SenseTime Group shares surged as much as 23 percent from their IPO price, adding billions of dollars to the start-up's market value as it debuted in Hong Kong in the city's final major float for the year.
“Investors share the belief in the transformative power of AI technology; that’s why SenseTime has grown into Asia’s leading artificial intelligence company in seven years.” SenseTime co-founder and CEO Xu Li said at the gong-banging ceremony in celebration of its debut.
The company raised $740 million in its initial public offering and priced its shares at HK$3.85 ($0.4937) each.
The deal valued SenseTime at $16.4 billion, while at the session's high its market capitalization had added some $3.8 billion.
SenseTime ended at HK$4.13 in its debut session, up 7.3 percent from its IPO price. It was the fifth most actively traded stock by turnover with 329.97 million shares changing hands worth HK$1.406 billion.
SenseTime ended at HK$4.13 in its debut session, up 7.3 percent from its IPO price. It was the fifth most actively traded stock by turnover with 329.97 million shares changing hands worth HK$1.406 billion
The broader Hang Seng Index gained just 0.11 percent while tech stocks in Hong Kong were marginally positive on the day.
SenseTime's IPO was Hong Kong's fifth largest in 2021, Dealogic data shows.
It shelved its first attempt on Dec 13 after the US Treasury added SenseTime to a list of "Chinese military-industrial complex companies" on Dec 10.
While SenseTime has said its inclusion on the blacklist did not impose any restrictions on its business operations, the ban meant US investors could not participate in the IPO.
SenseTime relaunched the deal on Dec 20, but with a higher cornerstone investor stake.
Cornerstone shareholders bought about 67 percent of the stock on offer in the IPO, up from the 58 percent stake flagged in the company's first attempt.
Pang Ming, head of macro and strategy research at China Renaissance Securities (Hong Kong), said, SenseTime’s solid performance will pave the way for more mainland AI firms to seek listings in Hong Kong.
He noted the market’s broader investor base and closer connection to the mainland as well as its continuing reform measures aimed at facilitating new economy stock listings.
“The HKEX is also eager to attract more of China’s home-grown businesses, as it is locked in a tight race with the mainland’s two Nasdaq-style technology exchanges,” Pang said, adding that the bourse’s emphasis on quality listings and technology credentials will likely encourage hard technology listings.
Kenneth Ho Shiu Pong, managing director of Equity Capital Markets at Haitong International Securities, said the quick response of investment banks and a transparent process led to SenseTime’s quick IPO relaunch.
Looking ahead into 2022, Ho said he expected the IPO market to be buoyant in the first and second quarter.
Companies in healthcare, TMT (technology, media and telecommunications) and consumption will likely to grab the spotlight next year, he added.
With Reuters inputs
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