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SenseTime rallies in Hong Kong trading debut after delay forced by US sanctions

By Jill Disis, CNN Business

SenseTime rallied in its Hong Kong debut Thursday, as it tried to move past a politically-fraught month that forced the Chinese artificial intelligence startup to delay its initial public offering.

Shares in the company were last trading at 4.29 Hong Kong dollars (55 cents) each, up more than 11% from an offer price of 3.85 Hong Kong dollars (49 cents). It raised about $740 million in the offering, selling some 1.5 billion shares.

Thursday’s trading debut comes about two weeks later than initially expected. The company postponed its launch on Hong Kong’s stock market earlier this month after the US Treasury Department placed it on a list of “Chinese military-industrial complex companies,” which meant Americans would be banned from investing in it.

The US Treasury said SenseTime was sanctioned because of the role its technology plays in enabling human rights abuses against the Uyghurs and other Muslim minorities in the western Chinese region of Xinjiang — accusations that SenseTime has strongly denied.

SenseTime revived its IPO last week, noting it had to exclude US investors from buying shares “due to the dynamic and evolving nature of the relevant US regulations.” It also acknowledged Washington’s action could “negatively” impact general investor interest.

The company said last week that it had secured $512 million from cornerstone investors, including state-owned Shanghai Xuhui Capital Investment. A cornerstone investor is usually a large institutional or sovereign investor that commits in advance to purchasing a stake in an IPO.

SenseTime, which was founded in 2014 in Hong Kong, is best known for its facial recognition software.

The move by the US Treasury Department earlier this month isn’t the first time SenseTime has run into trouble with Washington. In 2019, the company’s Beijing subsidiary was placed on a US entity list, which barred it from buying US products or importing American technology without a special license.

— Michelle Toh and Laura He contributed to this report.

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