China’s SenseTime prepares for HK IPO despite tech regulations, US blacklist

Photo: SenseTime Group

China’s artificial intelligence startup 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 U.S, lodged its preliminary filings Friday with the Hong Kong Exchange and Clearing Ltd, 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 $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 U.S. Entity List in 2019 amid trade tensions between Beijing and Washington. The U.S. 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 U.S. 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.

Reuters

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In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

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  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.