AI firm SenseTime files application for Hong Kong IPO
01:42, 31 August 2021
Hong Kong-based artificial intelligence firm SenseTime Group filed for an initial share sale in Hong Kong last week amid an ongoing state-led crackdown on China’s private sector.
The size of the initial public offering (IPO) was not disclosed in SenseTime’s application proof released on Friday.
According to its website, SenseTime’s technologies are based on augmented reality, facial recognition, autonomous driving, object recognition and medical image analysis.
Widening losses
The company’s revenue for full year 2020 rose over 13% on-year to CNY3.45bn (USD530m), according to its IPO application.
Full-year loss widened to CNY12.16bn from CNY4.97bn a year ago, while research and development (R&D) expenses rose 28% on-year to CNY2.45bn in 2020, the application noted.
The company added that 60% of the IPO proceeds will be used for R&D, while the remainder will be used for business expansion, acquisitions and general corporate purposes.
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Risk factors
SenseTime said in its application under “risk factors” that one of its units, Beijing SenseTime, was added to the US blacklist in October 2019, “which restricts its ability to purchase or otherwise access certain goods, software and technology and may adversely affect our business, financial condition and results of operations.”
The company also said that a discontinuation of government subsidies currently available “could adversely affect our business, financial condition, results of operations and prospects."
SenseTime, which was incorporated in 2014 in Hong Kong, will be offering class B shares, according to its IPO application draft.
“Class B shares typically have lower dividend priority than Class A shares and fewer voting rights. However, different classes do not usually affect an average investor’s share of the profits or benefits from the company’s overall success,” according to financial information website Investopedia.
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