SenseTime shrinks Hong Kong IPO size by 62 per cent to US$768 million as Chinese tech sell-off undermines valuation

China’s largest artificial intelligence company to kick off stock offering in Hong Kong on Tuesday amid tech sector wobble

SenseTime will raise as much as US$768 million at top-end of the IPO price range, versus previously targeted US$2 billion in proceeds

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Xu Li, CEO of SenseTime, showcases its facial recognition system at its Beijing showroom in this file picture from 2018. Photo: Bloomberg

Published: 1:35pm, 6 Dec 2021Updated: 7:20pm, 6 Dec 2021

SenseTime, China’s largest artificial intelligence (AI) firm, is trimming its stock offering in Hong Kong by more than half, as sentiment on technology stocks has soured amid a sell-off triggered by regulatory and privacy concerns.

The Hong Kong-based unicorn plans to raise as much as HK$5.99 billion (US$768 million) by selling 1.5 billion shares at HK$3.85 to HK$3.99 each, according to a term sheet seen by the Post. The company was earlier aiming for about US$2 billion in proceeds.

The global stock offering, which will officially kick off on Tuesday, fell victim to a slump in risk appetite, as mounting losses in Chinese technology stocks pummelled valuations and dragged the benchmark Hang Seng Index to its lowest level in more than 14 months in recent trading. Shanghai-listed China Tourism Group Duty Free last week paused its multibillion IPO plan.

Didi Global’s decision to delist from the US market heightened market decoupling risks, prompting Chinese regulators to issue a statement in an attempt to calm the markets. Reports suggesting US-listed Chinese firms were being pushed to cancel their listings were a “complete misreading and misinterpretation” of their regulations, they said.

Panellist speakers at the SenseTime AI Forum held during the World Artificial Intelligence Conference in Shanghai. Photo: Handout

“We see now is the right time to list our business in Hong Kong,” co-founder and chief executive officer Xu Li said during an online briefing on Monday. “Commercialisation [of our solutions] has been viable, so we see a clear path to profitability.”

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