SenseTime *Official* (HKSE: 0020)

[Shion]

Chinese AI startup SenseTime resumes push for $2bn Hong Kong IPO​

Despite US blacklisting, company eyes market debut by fourth quarter

https://asia.nikkei.com/Business/Ch...-SenseTime-resumes-push-for-2bn-Hong-Kong-IPO
HONG KONG -- Chinese artificial intelligence startup SenseTime has revived plans for an initial public offering in Hong Kong that could raise as much as $2 billion, two people familiar with the matter say.

SenseTime is working with advisers to finalize a listing application with the Hong Kong stock exchange, the sources said. Approval is required, and listing typically occurs three to six months after the application is filed.

SenseTime last year deferred plans for an IPO after the U.S. blacklisted it and seven other Chinese technology companies in 2019, alleging their facial recognition software and other products contributed to human rights violations. The startup now eyes a late third quarter or fourth quarter debut that could raise $1.5 billion to $2 billion, the sources said.


"The company has maintained growth momentum despite the U.S. blacklist," one source said. "With the adoption of artificial intelligence tools such as facial recognition picking up speed, investors should bid well for SenseTime shares."

Media reports have said SenseTime intended a dual listing in Shanghai and Hong Kong, but the two sources said its current plans called for selling shares in Hong Kong first. The company is still weighing all of its options, and the IPO plans could still change.

SenseTime did not immediately respond to an email sent after office hours seeking comment on the IPO plans.

When SenseTime co-founder Tang Xiaoou gave a presentation at Massachusetts Institute of Technology in 2018, he said his company beat Facebook to achieve a nearly 99% success rate for its facial recognition technology, making it one of the world's most advanced AI solution providers.

After the U.S. blacklisting, SenseTime held several investor meetings to explain the company's evolving business model, which now encompasses facial recognition, robot delivery, smart health and education. It also opted to raise about $1 billion privately from investors to fuel growth, people familiar with that effort said last year.

In January, Chinese media reported that SenseTime agreed on fundraising terms that valued the company at $12 billion.

SenseTime, founded in 2014, has raised $2.6 billion from investors including SoftBank Vision Fund, Hopu Investment Management and Fidelity International, Crunchbase data shows.

Beyond its operations in mainland China, the startup says it has a presence in Hong Kong, Japan, Singapore, South Korea, Saudi Arabia and the United Arab Emirates.

Cash flow remained negative as of last year given the company's investment plans, sources said. SenseTime's latest financial position was not immediately clear, though one source said revenue growth continued to be "strong."

 

[Shion]

China's SenseTime prepares for Hong Kong IPO despite tech regulations and US blacklist​

https://www.channelnewsasia.com/bus...ng-ipo-china-regulations-us-blacklist-2141941
HONG KONG: China's artificial intelligence start up SenseTime Group has identified the mainland's tightening technology regulatory regime as a key risk for investors in its proposed Hong Kong initial public offering (IPO), according to its filings.

SenseTime, which is also blacklisted in the US, lodged its preliminary filings Friday with the Hong Kong Exchange and Clearing, operator of the city's stock exchange.

It did not identify a raising size but Reuters reported on Aug 19 the firm is aiming to raise up to US$2 billion.

SenseTime declined to comment on the size of the deal.

The company provides technology-based applications including, facial recognition and video analysing and autonomous driving.

In the filings, SenseTime said China's changing regulations, especially towards sensitive data handling, could impact its business but it was unable to quantify the effects of the new rules.

"We cannot predict the impact of the draft measures, if any, at this stage, and we will closely monitor and assess any development in the rule-making process ... it remains uncertain whether the proposed measures will be applicable to our business," it said.

China announced on Aug 20 new rules governing the better storage of users data which has instructed companies not to mismanage or misuse the data.

SenseTime was among eight Chinese tech companies placed on the US Entity List in 2019 amid trade tensions between Beijing and Washington. The US alleges the companies played a role in human rights abuses against Muslim minority groups in China.

SenseTime said at the time that it strongly opposed the US ban and would work with relevant authorities to resolve the situation.

In the filings it said: "If our subsidiary remains on the Entity List on a prolonged basis, we may not be able to compete effectively in certain business lines, and our business, results of operations and financial condition could be materially and adversely affected."

SenseTime had considered listing on the tech-focused STAR Market in Shanghai, but shifted to Hong Kong as its application for STAR was progressing slowly, Reuters has previously reported.

SenseTime has not identified when it will list but applications to the Hong Kong Stock Exchange typically take three to four months from its first filings.

 

[Shion]

SenseTime discussing fate of $1.05 billion Hong Kong IPO with exchange: Sources​

https://www.straitstimes.com/busine...te-of-105-billion-hong-kong-ipo-with-exchange
HONG KONG (REUTERS) - Chinese artificial intelligence start-up SenseTime Group is discussing the fate of its planned US$767 million (S$1.05 billion) Hong Kong initial public offering (IPO) with the city's stock exchange on Friday (Dec 10), two people with direct knowledge of the matter said.

The move comes after the Financial Times reported on Thursday that the United States will put the company on an investment blacklist on Friday that would mean US-based investors cannot buy shares in the company.

The sources declined to be named, as the information was not yet made public. SenseTime had not been aware the blacklist was under consideration, the sources told Reuters on Thursday.

The Hong Kong Stock Exchange declined to comment and SenseTime did not immediately respond to Reuters' requests for comment.

SenseTime had planned to sell 1.5 billion shares within a price range of HK$3.85 to HK$3.99 (67 to 69 Singapore cents) each in the IPO. It was due to set the final price and allocate shares to institutional investors on Friday, according to the firm's filings.

The sources said SenseTime and its advisers held urgent talks late on Thursday and early on Friday on how the ban would impact its the IPO, which was in its final stages when the blacklist report was published.

US-based investors had lodged bids to buy stock during the bookbuilding process, one person with direct knowledge of the matter told Reuters.

But a second source said some investors started to pull their bids to buy shares once the likely ban was reported.

More than half of the deal, US$450 million, had been sold to cornerstone investors ahead of the transaction's expected launch on Monday. SenseTime is due to start trading on Dec 17, the filings showed.

 

[Shion]

SenseTime to delay Hong Kong IPO after US blacklist report​

https://www.businesstimes.com.sg/co...delay-hong-kong-ipo-after-us-blacklist-report
[HONG KONG] Chinese artificial intelligence firm SenseTime Group is delaying its Hong Kong initial public offering (IPO), according to people familiar with the matter, as tensions with the US government ratcheted higher at the last minute.

The artificial intelligence (AI) startup's IPO was not priced last Friday (Dec 10) as expected because the banks needed to make adjustments and address regulatory concerns, one of the sources said, asking not to be identified as the information is private.

Bankers had been gauging investor interest in the IPO when news broke about the plan to add the firm to the Treasury Department's list of so-called Chinese military-industrial complex companies, timed to fall on Human Rights Day as well as SenseTime's expected pricing.

SenseTime said in a statement on Saturday that the US government's accusations are "unfounded and reflect a fundamental misunderstanding of our company". The firm has "been caught in the middle of geopolitical disputes" and it will "take appropriate action to protect the interests of our company and our stakeholders". Deliberations are ongoing, and the share sale could resume at some point in the future, the sources said.

A pause or withdrawal of the offering would make it more difficult for SenseTime to satisfy early backers with whom it has an agreement that it will go public by a certain date, people familiar with the matter said. To proceed with the IPO, the company would likely need to update the section of its prospectus detailing the risks for potential investors to reflect the blacklist development, the people said.

SoftBank Group agreed in the most recent funding round for SenseTime that if the company did not list by April, it would have to buy back the shares from investors, one of the sources said, asking not to be identified because the information is private. A representative for SoftBank did not respond to a request for comment.

The company was already on one US government blacklist, having been put on the Commerce Department's Entity List in 2019 alongside more than 20 other entities. The AI firm was added to the list because of its alleged role in human rights violations against Uyghur Muslims in China's Xinjiang province. SenseTime previously denied the allegations. Companies on the entity list are prohibited from doing business with American companies without a license.

SenseTime got a boost during the coronavirus pandemic when its facial recognition software was used in numerous Chinese cities to monitor whether people entering subways were wearing masks, take their temperature and even detect their identities while their faces were covered.

The shares were expected to start trading on Dec 17. China International Capital, Haitong International Securities Group and HSBC Holdings were the joint sponsors for the first-time share sale.

Eight cornerstone investors had committed to subscribe for US$450 million in SenseTime shares, representing about 59 per cent of the offering, according to a preliminary prospectus. They include the state-owned Mixed-Ownership Reform Fund, which is buying US$200 million worth of shares, as well as funds affiliated with Hong Kong's Pleiad Investment Advisors.

SenseTime's investors also include Alibaba Group Holding, Primavera Capital, Sailing Capital and Silver Lake, the prospectus showed.

 

[Shion]

SenseTime plans Hong Kong IPO relaunch Monday, sources say​

https://www.channelnewsasia.com/bus...-kong-ipo-relaunch-monday-sources-say-2383841
HONG KONG : Chinese artificial intelligence startup SenseTime Group plans to keep its Hong Kong initial public offering (IPO) at US$767 million as it considers re-launching the withdrawn deal as early as Monday, four people with direct knowledge of the matter said.

The people could not be identified as the information is not public.

A spokesperson for SenseTime, which withdrew its Hong Kong IPO on Monday after the administration of U.S. President Biden put the company on a blacklist, declined to comment to Reuters.

The U.S. Treasury added SenseTime to a list of "Chinese military-industrial complex companies," last week accusing it of having developed a facial recognition programme to determine a target's ethnicity, with a focus on identifying ethnic Uyghurs.

SenseTime and its advisers were working on Thursday to finalise the cornerstone investor stake in the new IPO, one of the sources said.

It was likely the cornerstone stake would be about US$450 million, in line with the first IPO attempt, but the composition of investors could change, they added.

SenseTime is expected to price the deal by the end of next week and list on the Hong Kong Stock Exchange before Dec. 31.

Chinese buyers were likely to take nearly all of the US$317 million worth of stock in the IPO not taken by cornerstone shareholders, two of the sources said.

SenseTime had not expected the U.S decision, sources told Reuters at the time. It came as the bookbuild to raise US$767 million was being finalised.

The company was working to update its prospectus to include the investment ban in its risk factor sections, sources had told Reuters.

SenseTime could launch the deal on Monday to raise the same amount as the initial Hong Kong IPO, they said, pending approval from the Hong Kong exchange of the amended risk disclosures.

SenseTime had planned to sell 1.5 billion shares in a price range of HKUS$3.85 to HK3.99 each, according to its initial filings.

Bloomberg News first reported the deal's relaunch on Thursday.

(Reporting by Kane Wu, Scott Murdoch and Julie Zhu; Editing by Sumeet Chatterjee, Christopher Cushing and Barbara Lewis)

 

[Shion]

SenseTime relaunches US$767 million Hong Kong IPO after US investment ban​

https://www.channelnewsasia.com/bus...hong-kong-ipo-after-us-investment-ban-2390451
HONG KONG: Chinese artificial intelligence start-up SenseTime Group relaunched its US$767 million Hong Kong IPO on Monday (Dec 20), a week after pulling the listing in the wake of the company's inclusion on a US investment blacklist.

SenseTime retained its target of selling 1.5 billion shares for between HK$3.85 and HK$3.99 each, according to regulatory filings, with the final price to be set on Thursday.

However, it will now rely on cornerstone investors to buy about US$511 million, or around 67 per cent, of shares, up from US$450 million, or 58 per cent, of shares previously.

SenseTime said its inclusion on the US blacklist did not impose any restrictions on its business operations, but added the resulting lack of US investors could impede its ability to raise capital in the future and reduce trading liquidity.

The US Treasury added SenseTime to a list of "Chinese military-industrial complex companies" on Dec 10, accusing it of having developed a facial recognition programme to determine a target's ethnicity, with a focus on identifying ethnic Uyghurs.

UN experts and rights groups estimate more than a million people, mainly Uyghurs and members of other Muslim minorities, have been detained in recent years in a vast system of camps in China's far-west region of Xinjiang.

Some foreign lawmakers and parliaments have labelled the treatment of Uyghurs as genocide, citing evidence of forced sterilisations and deaths inside the camps. China denies these claims and says Uyghur population growth rates are above the national average.

"Our group's products and services are intended for civilian and commercial uses and not for any military application," SenseTime said in the revised filings on Monday.

The company previously said it "strongly opposed" the designation of the blacklist and that accusations against it were unfounded.

SenseTime's shares are due to start trading on the Hong Kong Stock Exchange on Dec 30.

 

[Opps-gal]

Anyone buying?

 

[Shion]

SenseTime jumps 17% on debut after IPO delayed by US sanctions​

https://www.straitstimes.com/busine...ps-on-debut-after-ipo-delayed-by-us-sanctions

 

[thelittlemonkeye]

the pltr of china, not buying next year

 

[LPPLKPKB]

SenseTime jumps 17% on debut after IPO delayed by US sanctions​

https://www.straitstimes.com/busine...ps-on-debut-after-ipo-delayed-by-us-sanctions

only +7.3% by the end of the day. Interesting company but revenue growth is lame at mid teens.

 

[LPPLKPKB]

KNN, I got this huan completely wrong, bad call, +33% today!

 

[thelittlemonkeye]

Any company being blacklisted by the US is a risky play. Look what happened to huawei, they used to be number 1 in smartphone sales, now who is buying huawei phones? I doubt Sensetime will achieve any good success internationally since they are being blacklisted. So, if their main focus is domestic Chinese market, they are up against Tencent and Baba, who by the way are Number 2 and Number 3 in terms of R&D expenditure in China. The only competitive edge i see they have is the foundry for enterprise use. Alibaba has city brain already, and from what I see performs just as well, or even better than sensetime.

If sensetime can't get good positive cashflows within the next 2 - 3 years, Tencent and Baba will just outperform them because those 2 companies have R&D cashflow to burn. I'd treat Sensetime stock the way a VC fund would, not worth plowing huge money into this.

Just my 2 cents.