US-blacklisted Chinese AI firm Megvii cleared for US$500 million Hong Kong IPO
- Beijing-based Megvii is expected to file its updated listing information soon with the Hong Kong stock exchange
- The company raised US$750 million in May last year, which put its valuation at more than US$4 billion
Chinese artificial intelligence (AI) company Megvii’s plans for a US$500 million Hong Kong initial public offering (IPO) are back on track after its application was cleared by the city’s stock exchange, two sources with direct knowledge of the matter said.
Megvii, which was put on the US trade blacklist in October, was asked to provide more information in November when the company faced the Hong Kong stock exchange listing committee to seek the go-ahead for the transaction.
Beijing-based Megvii, which is known for its facial recognition platform Face++, is aiming to be the first Chinese AI firm to go public.
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The company said at the time it “strongly objected” to the blacklisting.
Megvii is expected to file its updated listing information soon with the Hong Kong exchange, according to sources who declined to be named because the information has not been made public.
Citigroup, Goldman Sachs and JPMorgan are working on the updated listing and the three banks declined to comment. Megvii and a Hong Kong stock exchange spokesman also declined to comment.
Megvii filed its IPO application on August 25. Under the city’s stock exchange rules, it has six months to list from that date.
The company, however, can apply for a three-month extension once that deadline has passed, according to stock exchange rules.
A timetable for the deal has yet to be put in place, and sources said the company would wait until after the Lunar New Year holiday, which starts on January 25, when financial markets start to rev up for the year.
Hong Kong is entering a seventh month of pro-democracy protests, and the listing of the Chinese facial recognition company is expected to be closely watched by local activists.
Megvii was founded in 2011 by chief executive Yin Qi and two friends from Tsinghua University. The company provides AI technology to governments and companies, including e-commerce giant Alibaba Group Holding and fintech affiliate Ant Financial Services, as well as telecommunications equipment supplier Huawei Technologies.
