SenseTime IPO: Shares soar on Hong Kong trading debut after US sanctions delay delay

The company’s shares last traded at 4.29 Hong Kong dollars (55 cents) each, more than 11% higher than an offer price of 3.85 Hong Kong dollars (49 cents). It raised approximately $740 million in the offering and sold some 1.5 billion shares.

Thursday’s trading debut comes about two weeks later than initially expected. The company delayed its launch on the Hong Kong stock exchange earlier this month after the US Treasury Department placed it on a list of “Chinese military-industrial complex companies,” meaning Americans should not invest in it.

The US Treasury Department said SenseTime was sanctioned for the role its technology plays in facilitating human rights abuses against Uyghurs and other Muslim minorities in the western Xinjiang region of China — allegations SenseTime has strenuously denied.

SenseTime revived its IPO last week, noting that it had to exclude US investors from buying stocks “due to the dynamic and evolving nature of relevant US regulations.” It also acknowledged that Washington’s move could have a “negative” effect on investors’ general interests.

The company said last week it had secured $512 million from cornerstone investors, including state-owned Shanghai Xuhui Capital Investment. A cornerstone investor is usually a large institutional or sovereign investor who commits upfront to buy a stake in an IPO.

SenseTime, founded in 2014 in Hong Kong, is best known for its facial recognition software.

The move by the US Treasury Department earlier this month isn’t the first time SenseTime has run into trouble with Washington. In 2019, the company’s Beijing subsidiary was placed on a US Entity List, preventing it from purchasing US products or importing US technology without a special permit.

— Michelle Toh and Laura He contributed to this report.

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