SenseTime's listing stopped three days before pricing
The prospectus of 7 December 2021 offered 1.5 billion Class B shares in a range of HK$3.85 to HK$3.99, with the price to be named on 16 December. On 10 December the U.S. Department of the Treasury added SenseTime Group Limited to the Non-SDN Chinese Military-Industrial Complex Companies List. On 13 December the company announced the listing was postponed and all application monies refunded in full; on 20 December it relaunched with a supplemental prospectus and set dealings for 30 December.
Why it matters
The prospectus showed what was not publicly known about Chinese computer-vision companies: for the first half of 2021 research and development cost RMB1,771.7 million against revenue of RMB1,651.8 million — 107.3 per cent of revenue. Separately, this is the first documented case of one state's sanctions decision stopping a listing on another state's exchange: not by forbidding trading, but by the company itself returning the money and rewriting the prospectus.
The financial record in the prospectus: revenue of RMB1,853.4 million in 2018, RMB3,026.6 million in 2019 and RMB3,446.2 million in 2020; research and development of RMB848.7 million, RMB1,916.0 million and RMB2,453.9 million, being 45.9, 63.3 and 71.3 per cent of revenue; net losses of RMB3,432.7 million, RMB4,967.7 million and RMB12,158.3 million. As of 30 June 2021 the research staff numbered 3,593, among them more than 250 PhDs and PhD candidates, with 40 professors leading the work. Commercial models produced came to 1,152 in 2019, 9,673 in 2020 and 8,377 in the first half of 2021. The postponement announcement says all application monies are refunded in full without interest, that payments were to go out on 15 December, and that the interest accrued was given to The Community Chest of Hong Kong. The name added to the list is given in the document as SenseTime Group Limited, while the issuer is SenseTime Group Inc. What this record does not assert. It names no final offer price and no sum raised: the allotment-results announcement set for 29 December could not be obtained — the Hong Kong exchange's announcement search returns an empty result set for this issuer over any date range, through the shell and through the browser alike, and the company's investor page lists only recent filings. So HK$3.85 a share and HK$5.775 billion raised do not appear in this record: in the documents read, HK$3.85 occurs only as the bottom of the indicative range. The record does not explain the grounds for the sanctions decision: the documents read give the fact of the listing and its date, not the reasons.