Shares of artificial intelligence (AI) chipmaker Black Sesame International Holding Ltd (黑芝麻智能) tumbled as much as 35 percent on their debut, dealing a blow to Hong Kong’s efforts to lure more technology listings.
Shares in the company backed by Xiaomi Corp (小米) yesterday fell to as low as HK$18.28 on the Hong Kong Stock Exchange. They had been priced at HK$28, the bottom of the marketed range in an initial public offering (IPO) that raised HK$1.04 billion (US$133.5 million).
The listing comes as global markets are recuperating from a rout earlier this week. The stock’s reception is a setback for Hong Kong as it strives to revive its equity market, which has seen moribund volumes of IPOs and liquidity concerns stemming from the region’s economic sluggishness.
Photo: Bloomberg
Nearly 95 percent of the shares offered were snapped up by just five investors prior to the first day of trading, according to a Wednesday filing from the company, which specializes in chips used in autonomous driving systems.
A subsidiary of Guangzhou Automobile Group Co (廣州汽車集團) and an investment unit of Ningbo Joyson Electronic Corp (寧波均勝電子) participated as cornerstone investors.
“Given the concentrated share take up, combined with the tight float, listing performance could be distorted,” said Clarence Chu, an analyst at Aequitas Research Pvt who publishes on the platform Smartkarma.
The deal’s international portion was subscribed 1.05 times.
That reflects weak demand from institutional investors, Chu said.
IPOs in Hong Kong have raised US$2.44 billion so far this year, down 7.6 percent from the same period last year and far below 2021 levels, Bloomberg data showed.
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