(Bloomberg) — Mobvoi Inc., a Chinese artificial intelligence developer backed by Alphabet Inc.’s Google, ended its first day of trading lower in Hong Kong, marking the third stock market failure in the city this week.
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Shares finished down 3.2%, even after selling near the bottom of the listed price range for its IPO. The company and its shareholders raised HK$321 million ($41 million), far less than the $200 million to $300 million they were targeting last year. The drop also contrasts with gains in Hong Kong and Asian stock markets on Wednesday.
Known for its Ticwatch smartwatches and Chumenwenwen voice-activated search services, Beijing-based Mobvoi was founded in 2012 by a group of former Google employees. It won Alphabet’s backing just three years later, marking the US tech giant’s first direct investment in China since pulling its search engine out of the country in 2010.
The disappointing debut adds pressure to Hong Kong’s struggling private equity market, which saw IPO proceeds fall last year to the lowest level in more than two decades due to concerns over growth. economic of China. On Tuesday, bubble tea maker Sichuan Baicha Baidao Industrial Co. fell 27% in its first session, following the city’s biggest IPO since November.
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Mobvoi’s shares fell 22% in early trading, recovering most of the losses to finish below the IPO price at HK$3.68. The shares were sold at HK$3.80 each, compared with a marketed range of HK$3.70 to HK$4.10. Bankers were trying to price the IPO above Mobvoi’s last private valuation of around $757 million, according to analyst Andrei Zakharov.
“Management expects to record a decrease in revenue, gross profit and gross profit margin for the AI business solutions business segment in 2024,” Zakharov wrote in a recent note on Smartkarma, setting a target price of HK$2.70 per share for Mobvoi.
(Updates with closing prices in second and fifth paragraphs.)
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