Xiaomi-backed AI chipmaker Black Sesame falls in Hong Kong debut as AI frenzy wanes
Shares of artificial intelligence chipmaker Black Sesame International Holding Ltd. tumbled as much as 35% on their debut, dealing a blow to Hong Kong's efforts to lure more technology listings.
The Xiaomi Corp.-backed company's shares fell to as low as HK$18.28 Thursday in the Hong Kong Stock Exchange. They had been priced at $28, the bottom of the marketed range in an initial public offering that raised HK$1.04 billion ($133 million).
Its listing comes as global markets are recuperating from a rout — including downturns in AI stocks — 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. Hong Kong Financial Secretary Paul Chan was among the attendees of Black Sesame's listing ceremony in Hong Kong Thursday.
Nearly 95% 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. and an investment unit of Ningbo Joyson Electronic Corp. participated as cornerstone investors.
“Given the concentrated share take up, combined with the tight float, listing performance could be distorted,” Clarence Chu, an analyst at Aequitas Research Pvt. who publishes on the platform Smartkarma, said in a note.
The deal's international portion was subscribed 1.05 times, according to the filing. That reflects weak demand from institutional investors, Chu said.
IPOs in Hong Kong have raised $2.44 billion so far this year, down 7.6% from the same period in 2023 and far below 2021 levels, according to data compiled by Bloomberg.
Exchange operator Hong Kong Exchanges & Clearing Ltd. last year set a lower threshold for advanced technology companies, including those in artificial intelligence and semiconductors, to list in the Chinese
Read more on tech.hindustantimes.com
