SenseTime, which was accurately attacked by the United States on the "pricing day", was officially listed on the Hong Kong Stock Exchange today (December 30).
It is reported that the final offer price of SenseTime is set at HK$3.85 per share. Based on this calculation, the net proceeds of the global offering to be collected by the Company are estimated at approximately HK$5.552 billion with a share code of 0020.
According to Futu data, affected by the overall trend of Hong Kong stocks, in the dark market, SenseTime-W shares fell lower, and the dark market closed below the issue price, with the latest market value of HK$126.806 billion, about US$16.269 billion. However, as soon as the market opened, the opening price rose to HK$3.91 per share, an increase of about 1.56% from the issue price of HK$3.85. Based on this calculation, SenseTime's current market capitalization is HK$147.1 billion. Compared to the last round of financing, the market value increased by one-third. The world's largest IPO in the field of artificial intelligence was born.
Shang Tang rang the bell scene, picture source: Shang Tang
In fact, behind the successful listing of SenseTime Hong Kong stocks, it can be described as a series of twists and turns.
Originally planned, SenseTime will be listed on December 17, but when SenseTime proceeded with its own listing plan step by step, on December 10, the same day that SenseTime planned to determine the IPO price, the U.S. Treasury Department announced that SenseTime would be included in the "List of Non-SDN Chinese Military Complex Enterprises", and the companies in this list will not be able to be invested by U.S. investors.
For SenseTime, which is about to be listed, it is tantamount to a precise blow to the door. However, SenseTime also gave a clear response at the first time, "We believe that this decision is groundless with the relevant allegations and reflects a fundamental misunderstanding of our company." Technological development should not be influenced by geopolitics. ”
At the same time, SenseTime also announced on the Stock Exchange on December 13 that in order to protect the rights and interests of investors, it will adjust the global offering and listing arrangements and refund all the application shares to all applicants.
Announcement on the adjustment of the global offering and listing arrangement, Image source: SenseTime - W Announcement
Subsequently, SenseTime quickly restarted the listing process. On December 20, SenseTime announced on the Hong Kong Stock Exchange that the company officially restarted the public offering, specific to the details of the issuance scale, the prospectus shows that the amount of funds raised, the size of the offering and the price range of SenseTime's re-offering have not changed, and it is expected to issue 1.5 billion shares, the prospectus price is between HK$3.85 per share to HK$3.99, raising about HK$6 billion and 1,000 shares per lot.
It is worth noting that compared with the cornerstone investors disclosed in the initial IPO offering announcement, it is clear that the list of cornerstone investors disclosed by SenseTime-W in the second IPO has changed significantly, that is, all foreign investors are excluded.
Mixed Ownership Reform Fund, Guosheng Overseas Hong Kong, Shanghai Artificial Intelligence Industry Equity Investment Fund, sachinel Hong Kong 4 are still listed, while GF Fund, Pleiad Fund, WT, Focustar and Hel Ved 4 foreign investors withdrew from the original list, in addition, Xuhui Capital, Guotai Junan, Hong Kong Science and Technology Park Venture Capital Fund, Xima Ophthalmology, Taizhou Cultural Tourism supplemented the position to become new investors. The updated Cornerstone investor subscription reached $510 million, an increase of $600 million compared to the original plan.
After being accurately suppressed by the United States, SenseTime's fundraising process has indeed been affected, but the scale of investment has become larger.
Cornerstone Investor Subscription, Image Source: SenseTime-W Announcement
The listing of SenseTime also means that it has ushered in another layer of new challenges, because SenseTime has not yet entered the profitable stage.
Specific to the revenue level, from 2018 to 2020 and the first half of this year, SenseTime's revenue was 1.85 billion yuan, 3.03 billion yuan, 3.45 billion yuan and 1.65 billion yuan, respectively, with losses of 3.43 billion yuan, 4.97 billion yuan, 12.16 billion yuan and 3.71 billion yuan in the same period, with a cumulative loss of 24.27 billion yuan in three and a half years, equivalent to an average daily loss of 19 million yuan.
Behind the continuous loss is SenseTime's strong investment in research and development, the prospectus shows that in the corresponding reporting period, SenseTime's R&D expenditure was 850 million yuan, 1.92 billion yuan, 2.45 billion yuan and 1.77 billion yuan, respectively, and the proportion of R&D as a proportion of revenue increased year by year, even exceeding the company's revenue in the first half of 2021. 60% of the IPO will also be used for research and development.
So after the completion of the IPO, can the companies represented by SenseTime show a matching tangible growth in the face of high R&D investment and continuous losses?
Dr. Xu Li, co-founder, chairman and CEO of SenseTime, Image source: SenseTime
In this regard, Dr. Xu Li, co-founder, chairman and CEO of SenseTime, said in his speech at the listing ceremony: "Enterprises in each era carry their own different hopes and responsibilities, and our proposition is how to go from survival and catch-up to development and creation. When we see a huge breakthrough in technology, SenseTime hopes to promote the landing of technology, use technological breakthroughs to redefine scenes and patterns, and refresh the public's understanding of artificial intelligence. SenseTime has always believed that the incremental value brought by the transformation of artificial intelligence technology will surely promote the arrival of an intelligent era of inclusiveness and fairness. ”