SenseTime Group shares soared as much as 23% from their IPO price on Thursday, boosting the artificial intelligence start-market up’s worth by billions of dollars as it made its Hong Kong debut in the city’s final significant float of the year.
The IPO price was established at the lower end of the range by SenseTime, leaving an opportunity for price performance after the IPO.
Some analysts had predicted that the stock would suffer due to low interest during the IPO process and concerns regarding SenseTime’s presence on a US investment blacklist, which forced the Chinese company to abandon its first attempt to list.
In its initial public offering (IPO), SenseTime raised $740 million at a price of almost $0.5 per share. In its first trading session, SenseTime closed at HK$4.13, up 7.3 percent from its IPO price. It was the seventh most actively traded stock in turnover, with 329.97 million shares worth HK$1.406 billion changing hands.
In 2021, SenseTime’s initial public offering (IPO) was Hong Kong’s fifth-largest. SenseTime Group Inc. is likely to make founder Tang Xiao’ou one of the world’s wealthiest individuals, just weeks after the US placed a company unit on a blacklist for suspected human rights breaches.
Since Didi Global Inc.’s IPO in New York in July, which provoked a regulatory backlash in Beijing, SenseTime is the first foreign sale by a high-profile Chinese digital startup.
The broader Hang Seng Index rose 0.11 percent, while Hong Kong’s tech stocks were slightly higher on the day. SenseTime was valued at $16.4 billion after the purchase, and its market capitalisation had increased by $3.8 billion at the session’s high.
The increases defied most analysts’ predictions that the stock would drop or trade flat as a result of the IPO’s relatively low demand.
According to regulatory filings with the Hong Kong Stock Exchange, institutional investors submitted orders for only 1.5 times the quantity of stock on sale in the international tranche. The retail oversubscription rate was 5.12 times, according to analysts, which is considered low for a Hong Kong IPO.