AI Newcomer Cloudwalk Technology Seeks IPO on Shanghai STAR Market

A visitor to CloudWalk’s booth at CES ASIA in Shanghai in June 2018 File photo: VCG

Cloudwalk Technology, known as one of China’s four artificial intelligence (AI) “dragons”, is set to become the first Chinese unicorn to go public in the home, a milestone for the booming Chinese industry of AI amid a fierce technology race between the world’s two largest economies, growing public concern over data security and the increasingly hostile attitude of the US government towards corporations Chinese listed in the United States.

The Shanghai Stock Exchange on Tuesday accepted Cloudwalk’s IPO application after the Guangzhou newcomer updated his financial data in early June. If the review process goes smoothly, the remaining steps before the IPO involve the request for a quote, the IPO roadshow, pricing and official public debut, according to insiders. of the sector.

A company spokesperson declined to disclose more information about the IPO when contacted by the Global Times.

Some analysts expect the IPO to raise the company’s valuation to 5 billion yuan ($ 77.25 million).

Cloudwalk filed a prospectus with the Shanghai Stock Exchange in December 2020, seeking to raise 3.75 billion yuan ($ 573.5 million) in an IPO on the Chinese Nasdaq-style STAR market. According to the prospectus, the main activities of the company are to provide AI solutions for sectors such as finance, governance, transport and commerce as well as interactive human-machine systems.

“Listing opens a new avenue for Chinese AI and other high-tech companies that own pieces of personal data of Chinese residents. Compared to listing on the Nasdaq or other foreign capital markets, an IPO in the country could be more effective, while the risks of critical data leaks could be better managed, “Global told Global Times Wang Peng, associate professor at the Gaoling School of Artificial Intelligence at Renmin University of China.

He added that domestic listing is also a safer choice for Chinese high-tech companies, as Washington’s anti-China stance is poisoning its capital market as well.

Cash-hungry AI newbies in China are growing fast, and an IPO could help ease their financial crisis and focus more on achieving breakthroughs in bottleneck technologies, especially the underlying algorithm, observers said.

Washington blacklisted Cloudwalk, along with three other Chinese AI “dragons,” banning them from purchasing American supplies.

According to the prospectus, in 2020, Cloudwalk’s revenue reached 755 million yuan, but it recorded a net loss of 720 million yuan, due to huge investments in research and development.

Another Chinese AI newcomer, Alibaba-backed Megvii, completed its first round of Shanghai STAR stock market survey responses in June, a company spokesperson told the Global Times. The next steps for the company are the same as for other companies seeking an IPO, the spokesperson said.

And, SenseTime is reportedly exploring a dual listing both in Hong Kong and on the Chinese mainland. Yitu terminated its IPO application to STAR’s board of directors on March 11.

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