SenseTime has been approved by the Hong Kong Stock Exchange for listing and plans to raise US$2 billion

On the evening of November 19, Reuters quoted people familiar with the matter as saying that China's artificial intelligence unicorn SenseTime has been approved by the Hong Kong Stock Exchange to list in Hong Kong, with plans to raise up to US$2 billion.

Previously, on August 27, the Hong Kong Stock Exchange disclosed that SenseTime had submitted an application for listing to the Hong Kong Stock Exchange, with CICC, Haitong International and HSBC as joint sponsors. The prospectus shows that SenseTime's revenue in the first half of 2021 was 1.652 billion yuan, compared with 861 million yuan in the same period last year, a year-on-year increase of 91.87%. As of before the IPO, SenseTime's major shareholders were: SoftBank held 14.88%, Taobao China held 7.59%, Primavera Capital held 3.08%, Silver Lake Capital held 3.05%, and IDG Capital held 1.42%. In terms of executives, Tang Xiaoou holds 21.73%, Xu Li holds 0.9%, Wang Xiaogang holds 0.73%, Xu Bing holds 0.33%, and SenseTalent (Class B shares held by Xu Li, Wang Xiaogang, and Xu Bing) holds 12.17%.

According to information, SenseTime is an innovative technology company focused on the research and development of artificial intelligence algorithms. It was founded in 2014. The artificial intelligence software platform it developed can quickly deploy AI models in massive scenarios and achieve continuous expansion of its own scale. Its products widely serve commercial space management, residential property management, urban management, manufacturing, infrastructure, transportation, mobile devices and applications, medical and automotive fields.

From 2018 to 2020, SenseTime's revenue was RMB 1.853 billion, RMB 3.027 billion, and RMB 3.446 billion, respectively, with a compound annual growth rate of 36.37%. The total revenue for three years was 8.326 billion yuan. Compared with domestic companies of the same type, SenseTime's revenue was much higher than that of Megvii Technology (RMB 3.505 billion), CloudWalk Technology (RMB 2.046 billion), and Intellifusion Technology (RMB 790 million) in the same period.

At the same time, SenseTime's gross profit margin also performed well, reaching 56.50%, 56.80% and 70.60% in 2018-2020 respectively, and further increased to 73% in the first half of 2021, which is in a state of continuous rise; it is currently much higher than the industry's average gross profit margin of about 60%.

However, the high gross profit margin did not bring high net profit to SenseTime. On the contrary, it has been in a state of huge losses for a long time. The prospectus shows that from 2018 to 2020, SenseTime lost 3.432 billion yuan, 4.948 billion yuan, and 12.158 billion yuan respectively, with a total loss of 20.538 billion yuan in three years. During the corresponding reporting period, comparable AI companies had a total loss of 12.769 billion yuan, 2.684 billion yuan for CloudWalk Technology, and 1.651 billion yuan for Yuntian Lifei. If the loss of 3.713 billion yuan in the first half of this year is included, SenseTime’s total loss in three and a half years has reached 24.251 billion yuan.