China’s Megvii kick-starts IPO on Shanghai’s Star Market after Trump added facial recognition giant to entity list

The Beijing-based owner of Face++ software has kick-started an initial public offering on the Nasdaq-like exchange in Shanghai

Megvii let its US$500 million Hong Kong IPO application lapse in February last year after finding itself on a Washington trade blacklist

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Megvii’s facial recognition technology in action at the China Public Security Expo in 2017. Photo: Reuters

Published: 2:25pm, 13 Jan 2021Updated: 10:52pm, 13 Jan 2021

China’s Megvii Technology, one of the foremost developers of facial-recognition technology, is looking to favourable policies and more receptive investors at home to help bankroll its expansion in artificial intelligence.

The Beijing-based owner of facial-recognition software Face++ has kick-started an initial public offering (IPO) on the Nasdaq-like Star Market in Shanghai. The Post reported in April that it was mulling such a plan.

Megvii attempted to list in Hong Kong but let its application lapse in February last year after it was included on the Trump administration’s trade blacklist in October 2019. Inclusion on the blacklist meant that investment banks and overseas investors were likely to eschew taking part in the listing.

China is nurturing local hi-tech companies to fulfil its ambitions of becoming the global leader in fields such as artificial intelligence by 2030 and trying to offset any damage to promising start-ups from the US-China trade war.

The Face ++ facial recognition system. Photo: Simon Song

The Shanghai Stock Exchange launched the Star Market in mid-2019, bringing together Chinese tech companies and domestic investors. The Nasdaq-styled board allows unprofitable companies in areas such as AI, cloud computing, biotech and green energy to list in China for the first time.

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