By Gina Lee
Investing.com – SenseTime Group Inc. shares rose in their debut on the Hong Kong Stock Exchange on Thursday, raising HK$5.78 billion ($741.29 million) in the process.
The shares were steady at HK$4.33 by 11:52 PM ET (3:52 AM GMT), after gaining as much as 17% in early trading. SenseTime sold 1.5 billion shares at HK$3.85 apiece, the bottom of its marketed range and valuing the company at $16.4 billion.
This was SenseTime’s second attempt at a Hong Kong listing within the same month. The company was forced to shelve its first attempt on Dec. 13 after the U.S. Treasury placed it on an investment blacklist just as the institutional bookbuild for the IPO was wrapping up.
SenseTime relaunched the deal a week later with a higher cornerstone investor stake. The nine Chinese cornerstone shareholders, including the Mixed-Ownership Reform Fund and Shanghai Xuhui Capital Investment Co., snapped up around 67% of the stock on offer, up from the 58% in the first listing attempt. They also contributed $512 million.
However, institutional investors placed orders for just 1.5 times the amount of stock on sale in the international tranche, according to regulatory filings with the Hong Kong Stock Exchange. It was one of the poorest take-up rates for a major deal in Hong Kong in 2021, according to analysts.
The retail oversubscription rate was 5.12 times, also considered low for a Hong Kong IPO.
Founded in 2014, SoftBank Group Corp.-backed SenseTime specializes in artificial intelligence-powered software that analyzes faces and images. About 60% of the capital raised from the Hong Kong IPO will be used on research and development, SenseTime Chief Executive Officer Xu Li told Bloomberg before the company was placed on the blacklist.