Chinese facial recognition firm Megvii is reportedly considering a listing on Shanghai’s Nasdaq-like Star Market in order to make the most of favorable policies at home.
Why it matters: Megvii was initially planning a Hong Kong IPO but the company’s inclusion on the US’ so-called Entity List and the coronavirus outbreak have presented significant roadblocks.
- Megvii has been widely expected to become China’s first listed AI startup. The company’s IPO application to the Hong Kong Stock Exchange lapsed in February, even though it had three months to renew it.
- The Shanghai Star Market, launched in June last year, allows unprofitable companies in high tech industries to apply for a listing.
Read more: New STAR Market could lure domestic tech firms from Hong Kong IPO
Details: Despite considering a listing in Shanghai, neither Megvii nor its shareholders are in a rush to go public, one of the sources told SCMP.
- The company is exploring its options and it could still reapply for a Hong Kong IPO, according to the report.
- Meanwhile, Shanghai’s government is seeking to attract high-tech companies by helping them to obtain financing, fast-tracking their IPO applications, and granting them tax incentives—attractive proposition given the difficult first quarter in China.