HONG KONG: 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 United States, lodged its preliminary filings 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 US$2bil (RM8.39bil).
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 US Entity List in 2019 amid trade tensions between Beijing and Washington. The US 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 US 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 had 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