The company plans to issue 1.67 billion new shares at HK$1.20 each, or 9.1 per cent below its last-traded price the previous day, according to a stock exchange filing on Friday. No shareholder approval is required as the placement is being made under a previously-approved mandate.
Sensetime, which principally engages in the sale of AI software, hardware and related services, hired Guotai Junan International and Huatai International to arrange the transaction. Net proceeds after the placing commission and other costs will be HK$1.99 billion.
The proceeds from the placement will be used mainly for further enhancing the scale of the company’s industry AI infrastructure – SenseCore, supporting the further development of generative AI including large model research and product development, and for the purpose of general working capital of the company, it said.
“SenseTime’s strategic advancements in AI technology, particularly through the development of the SenseNova 5.0 model and its fullstack product matrix, have positioned the company as a leader in the AI field in China,” said Ryan Wang, an analyst at DBS in a note earlier this month. He has a buy rating on the stock with a target of HK$2, representing a 47 per cent upside from the current level.
The stock fell as much as 6.8 per cent to HK$1.23 on Friday, the lowest level since April 30, before recovering to close at HK$1.36, posting a gain of 3 per cent on the day. The broader market saw bigger declines, with the Hang Seng Index closing 1.7 per cent lower.
Hong Kong-based SenseTime, which saw revenue from its generative AI business triple last year to 1.18 billion yuan (US$163.4 million), is now aiming to turn profitable in the next two years.