SenseTime is Second Chinese Unicorn to List Overseas

When China’s largest artificial intelligence (AI) company begins trading on Thursday (Dec. 30) on the Hong Kong Stock Exchange, SenseTime, ticker HK:0020, will be the first overseas initial public offering (IPO) by a well-known Chinese technology unicorn since Didi’s July listing in New York.

The IPO will be offered at HK$3.85 (49 cents) per share, selling a potential 1.5 billion shares and raising HK$5.55 billion ($700 million), which is at the low end of the price range. The company has an estimated valuation of more than $16 billion, according to reports.

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SenseTime’s IPO route was circuitous and full of regulatory and political detours that ultimately put it on a dead-end road after being blacklisted by the U.S. on Dec. 10. The firm was blacklisted for allegedly developing facial recognition tools that can determine a target’s ethnicity, with a “focus on identifying ethnic Uyghurs” according to a U.S. Treasury press release regarding the sanctions.

Days later, SenseTime relaunched its IPO process with cornerstone investors upping the ante to $512 million from $450 million, and filed a supplemental prospectus for the listing, according to the filing. The cornerstone backers will buy shares equivalent to $511.6 million, about 67% of the offering, per the prospectus. U.S. investors are excluded from participating.

The cornerstone investors included state-backed Mixed-Ownership Reform Fund and the Shanghai Xuhui Capital Investment Co. Sponsors included China International Capital Corp., Haitong International Securities Group Ltd. and HSBC Holdings Plc.

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SenseTime is the third of China’s AI dragons to go public, according to a Wall Street Journal report. Dragons Megvii and Cloudwalk are planning to list on Shanghai’s STAR board, and Yitu submitted an IPO application for Shenzhen’s ChiNext board but suspended the process in March, KrAsia reported. It’s now said to be mulling a listing in Hong Kong.