The Chinese AI start-up raised US$740 million in its IPO and priced its shares at US$0.4937 each, at the bottom of the range flagged, valuing SenseTime at US$16.4 billion
SenseTime Group shares jumped 23 per cent from their initial public offering (IPO) price as they debuted on the Hong Kong Stock Exchange on Thursday.
The Chinese artificial intelligence (AI) start-up raised US$740 million in its IPO and priced its shares at HK$3.85 (US$0.4937) each, at the bottom of the range flagged, valuing SenseTime at US$16.4 billion.
The stock reached a high of HK$4.74 (US$0.61) in early trading, outstripping the Hang Seng Index that was up just 0.19 per cent.
The gains were in contrast to most analysts’ expectations that the shares would slip or trade flat due to the relative weak demand during the IPO process.
SenseTime sold 1.5 billion shares in what was its second attempt to list in Hong Kong in a matter of weeks.
It shelved its first attempt on Dec 13 after it was placed on an investment blacklist by the US just as the institutional book build for the deal was being concluded. The blacklisting meant US investors could not participate in the IPO.
SenseTime relaunched the deal on Dec 20, but with a higher cornerstone investor stake.
Cornerstone shareholders, all Chinese institutions, bought about 67 per cent of the stock on offer in the IPO, up from the 58 per cent stake flagged in the company’s first attempt.
Institutional investors placed orders for just 1.5 times the amount of stock on sale in the international tranche, regulatory filings with the Hong Kong Stock Exchange show.
Analysts said it was one of the poorest take up rates for a major deal in Hong Kong this year.
The retail oversubscription rate was 5.12 times, which analysts said was also low for a Hong Kong IPO.
We think the exclusion of US investors from the IPO led to poor international subscription, said Shifara Samsudeen, LightStream Research analyst who publishes on SmartKarma.