SenseTime IPO Jumps on Debut After Sanctions from the U.S.

    Artificial intelligence Company SenseTime Group Inc. jumped on the first day of trading in Hong Kong after delays over fresh U.S. sanctions hit its IPO.

    As per Bloomberg News, the stock gained about 23% early trading on its debut and was headed for the biggest ever gains on the first day of any IPO in Hong Kong since July. 

    SenseTime Group, backed by Softbank Corp, raised $741 million (HK$5.78 billion) by offering 1.5 billion shares at 3.85HK$ per share, which was at the lower end of the IPO price range.   

    The strong debut of SenseTime is considered an exception in this year’s new listing as Hong Kong was the worst performer in 2021. The performance comes as a defiance to the sanctions imposed by the U.S Treasury Department over the company’s involvement in alleged human rights in Xinjiang. It was also blacklisted by the Trumps Administration Commerce department, which the company denied the charges vehemently. 

    SenseTime went ahead with the listing and secured $512 million from investors, including the Mixed Ownership reform fund backed by the government and Shanghai Xuhui Capital investment Co.

    SenseTime, in its revised filing with the Hong Kong stock exchange early this month, said that it was excluding U.S. investors from its global offering due to the evolving and dynamic nature of the U.S. regulations. 

    SenseTime was founded by computer scientists in 2014. It specializes in facial recognition software technology powered by artificial intelligence technology. This technology works with retailers, healthcare researchers, and policing authorities globally. The company competes with rivals Megvii Technology, backed by Alibaba group and seeking a slice of market share in Shanghai. 

    As per Bloomberg data, Chinese companies that debuted this year on the Hong Kong stock exchange since July saw only a 1% increase on the first day of trading. Nine companies listed before the SenseTime IPO saw an average decline of 2.8% in the stock value.

    SenseTime plans to use 60% of its IPO proceeds in research and development as per a television interview by CEO Xu Li before the sanctions were announced. 

    The company has invested in a big way in supercomputers that can train AI-models-backed clients. This effort is set to pay off and narrow down the company’s losses. As of June 30, SenseTime revenue doubled to $259 million or 1.65 billion Yuan. In contrast, the net losses reduced to 3.7 billion Yuan from 5.3 billion Yuan in the first half of 2020. 

    According to Xu, the key to the commercialization of technology is cost and the company’s investments are towards achieving profitability. CEO Xu also acknowledged that the company’s overseas expansion was impacted due to sanctions by the U.S. Commerce Department


    RELATED ARTICLES

    investing in Crypto

    Investing in Crypto: A Guide for Smart Investors & Fundamentals

    Investing in cryptocurrencies has turned out to be an international phenomenon, attracting each institutional and...
    How To Find the Best FD Interest Rate for Senior Citizens Using an FD Interest Calculator

    How To Find the Best FD Interest Rate for Senior Citizens Using an FD Interest Calculator

    FDs are one of the most preferred investment products for senior citizens as they offer...
    When was Studio Ghibli founded

    When Was Studio Ghibli Founded: Japan’s Iconic Animation Legacy

    Studio Ghibli is a popular Japanese animation studio, known by many for its stunning movies,...
    online jobs for students

    Online Jobs for Students: Best ways to Earn Money & Build Skills 

    Balancing academics and price range can be challenging for college students, but online jobs offer...
    Best Trading Apps to Open a Demat Account

    Best Trading Apps to Open a Demat Account: Features & Fees

    Investing in the stock market has become more accessible than ever with trading apps that...
    5 Mistakes to Avoid for Choosing the Best Share Market App

    5 Mistakes to Avoid for Choosing the Best Share Market App

    Investing in the Indian share market is now easier than ever in the current digital...
    How to save money on Pinterest ads the best virtual cards for media buying

    How to save money on Pinterest ads: the best virtual cards for media buying

    Media buying on Pinterest requires precise budget management. Advertising expenses can be optimised by choosing...
    robots dot to dot nattapong

    Robots Dot to Dot Nattapong: Mind-Blowing Concepts!

    Robots dot to dot Nattapong unveils a fascinating intersection of creativity and technology. Ever wondered...
    Skills Every Criminal Justice Professional Needs to Succeed

    Skills Every Criminal Justice Professional Needs to Succeed

    The field of criminal justice is complex, challenging, and ever-changing. Professionals in this field are...
    Experience Ultimate Comfort with Tempur Mattresses from Benson’s Beds

    Experience Ultimate Comfort with Tempur Mattresses from Benson’s Beds

    In today’s fast-paced world, a good night’s sleep is more important than ever. With the...
    Expand Image Boundaries in Seconds With AI

    Expand Image Boundaries in Seconds With AI

    You’ve finally found the perfect image for your project or post, except it’s just a...