Zhong Sensetime's 'Spectacular Debut' Despite US Sanctions... Shares Surge 23%

[Asia Economy Reporter Yujin Cho] SenseTime, China's largest artificial intelligence (AI) company, which was placed on the U.S. government's investment ban list, showed a sharp rise from its first day of listing on the Hong Kong stock market.

On the 30th, SenseTime, which began trading on the Hong Kong Stock Exchange, saw its stock price reach 4.74 Hong Kong dollars at one point during the session, up 23.12% from the initial public offering price of 3.85 Hong Kong dollars. As a result, its market capitalization swelled to about 33.3 billion Hong Kong dollars (approximately 5.06 trillion Korean won).

Bloomberg reported that since the Chinese authorities began tightening regulations on overseas listings in July, the average first-day stock price increase for Chinese companies was only about 1%, making SenseTime's sharp rise highly unusual.

The market's positive reaction to a company facing U.S. sanctions is interpreted as the effect of short-term buying. Steven Long, Managing Director at Singapore investment bank UOB Kay Hian, said, "This sharp price surge appears to be driven by short-term speculative buying."

Gary Qing, an analyst at China's Guosen Securities, said, "Short-term investors aiming to take profits within a day or two rushed in, causing the stock price to surge. However, given the various negative factors, it will be difficult to sustain a trend of continuous price increases."

SenseTime was originally scheduled to list on the Hong Kong stock market on the 17th, but the listing was delayed by about two weeks after the U.S. Treasury Department added the company to its blacklist on the 10th due to investment restrictions related to human rights abuses in the Xinjiang Uygur Autonomous Region of China.

Through this public offering, SenseTime issued 1.5 billion new shares at 3.85 to 3.99 Hong Kong dollars per share, raising 5.775 billion Hong Kong dollars.

Although many U.S. investors withdrew due to the U.S. sanctions, the Chinese government's strategic industry development fund and several state-owned enterprises took over these shares, maintaining the overall scale of the listing.

Founded in 2014 by Tang Xiao and others from the Massachusetts Institute of Technology (MIT), SenseTime possesses AI-related technologies in various fields such as facial recognition, video analysis, and autonomous driving.

This content was produced with the assistance of AI translation services.