In another boost for Asia's equity capital markets, Black Sesame International (Black Sesame) debuted on the Hong Kong Stock Exchange (HKEX) on August 8. Headquartered in Wuhan, China, and with a presence in Singapore and San Jose, Black Sesame is one of the largest intelligent vehicle computing chip companies in the world.
The technology firm’s listing marks the second initial public offering (IPO) under the Hong Kong Chapter 18C scheme, HKEX’s new scheme for that eases listing requirements for ‘specialist technology companies’ which came into effect on March 2023. The Chapter 18C rules stemmed from the city’s efforts to attract the listing of more technology companies in Hong Kong, with biotech firm QuantumPharm being the first in June 2024.
Black Sesame raised around HK$1.04 billion ($133.5 million) after the sale of 37 million shares, giving it a market capitalisation of approximately $2 billion.
Black Sesame employed China International Capital Corporation (CICC) and Huatai as joint sponsors and overall coordinators for the initial public offering (IPO), and also used China Construction Bank International (CCB International) as overall coordinator, according to a HKEX filing.
The firm starting trading on HKEX’s mainboard on August 8 with shares priced at HK$28 per share. By market close, the stock had sank to HK$20.45, indicating a 27% fall from its original offer price, and on August 13, by close, the stock had fallen by another 4.4% to HK$19.5.
The share slump came off the back of market turmoil in Japan, after the Bank of Japan (BOJ) raised its interest rate for a second time in quick succession, affecting trades dependent on the stability of the Japanese yen. This volatility contributed to a tumultuous environment, particularly early last week.
In the prospectus, Black Sesame estimated net proceeds of around HK$985.4 million, post global offering after expenses, assuming an offer price of HK$29.15, without the exercise of an over-allotment option. In the same document, Black Sesame outlined their plan to use 80% of that estimated figure for their own research and development of their intelligent vehicle chip products.
Clifford Chance, Zhong Lun Law Firm, Maples Group, K&L Gates, Wilson Sonsini and JunHe were among those who advised Black Sesame’s IPO, according to the prospectus.
Fang Liu, partner at Clifford Chance, said in a statement: “This shows that Hong Kong's Chapter 18C listing regime for specialist technology companies is facilitating high-tech investments, and is a testament to the major technological and commercialisation strides made by autonomous driving firms in recent years.”
