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By Scott Murdoch and Kane Wuren
(Reuters) – Shares of the SenseTime Group were up 23% from their initial public offering (IPO) when they opened on the Hong Kong Stock Exchange on Thursday.
The Chinese artificial intelligence (AI) startup raised $ 740 million in its IPO and its share price was HK $ 3.85 ($ 0.4937) each, at the bottom of the marked range, SenseTime valued at $ 16.4 billion.
The stock reached a high of HK $ 4.74 at the start of trading, surpassing just 0.19% in growth.
The gains were contrary to the expectations of most analysts that the shares would be blurred or sold due to the relatively weak demand in the IPO process.
SenseTime sold 1.5 billion shares in a second attempt to be listed in Hong Kong in just a few weeks.
He left his first attempt on December 13 after entering the blacklist of investments as he was compiling the institutional book for the deal.
The U.S. Treasury added SenseTime to its https://www.reuters.com/article/us-sensetime-ipo-idCAKBN2IY0M8 list of “China’s complex military-industrial companies” list on Dec. 10, accused of developing a face-recognition program. to determine ethnicity, paying attention to the identification of ethnic Uighurs.
More than one million people, mostly Uyghurs and members of other Muslim minorities, have been arrested by UN experts and rights groups in recent years in a large camp system in China’s remote Xinjiang region.
The blacklist meant that U.S. investors could not participate in the IPO.
SenseTime relaunched the deal on December 20, but with a larger share of key investors.
Cornerstone shareholders, all Chinese entities, bought about 67% of the offer in IPO, out of a 58% stake in the company’s first attempt.
Institutional investors only placed 1.5 times the number of shares on sale internationally, according to the Hong Kong Stock Exchange’s regulatory filings.
Analysts say Hong Kong has been one of the most important deals this year.
The excess retail subscription rate was 5.12 times, analysts said it was also low for an IPO in Hong Kong.
“We believe that the exclusion of US investors from IPOs has led to poor international subscription,” said Shifara Samsudeen, a LightStream Research analyst at SmartKarman.
($ 1 = $ 7.7981 Hong Kong dollar)
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