Chinese artificial intelligence firm Megvii Technology is reportedly considering listing its shares at home to help it bankroll its planned expansion. The company, which is currently the world's leading developer of facial-recognition technology, is likely looking to take advantage of China's more favorable market policies and the growing interest of investors in high-tech stocks.
According to reports citing sources with knowledge of the matter, the Beijing-based tech firm is considering launching an initial public offering on China's NASDAQ-style tech innovation board called the Star Market. The company, which owned the facial recognition software Face++, initially tried to list its shares in Hong Kong back in February. However, the company had allowed its application to lapse and abandoned its plans.
The same sources had claimed that Megvii had since initiated talks to discuss the possibility of listing its shares on the Star Market. The tech firm is reportedly considering all possible options given its recent inclusion in the United States' trade blacklist and the ongoing coronavirus pandemic that has affected global equities markets.
Analysts have pointed out that listing its shares at home would be one of the company's best bets given the current circumstances. Acquiring private funding during these difficult times has become almost impossible. Given that Megvii has yet to turn a profit, securing investments will be challenging as most investors have become wary of placing their bets on companies without a clear path to profitability.
In China, the government has expressed that it will be supporting the ambitions of local high-tech startups as part of its wider strategy. The technology that Megvii is developing is one of the key segments under China's plans to become a global tech leader by 2030.
In line with its strategy to support tech startups, the Shanghai Stock Exchange launched the NASDAQ-style tech innovation board last year. The intention was to bring together domestic investors and tech startups in order to spur innovation. The establishment of the Star Market was under the orders made by Chinese President Xi Jinping, who had called on the accelerated development of key technologies to drive the country's future growth.
The board had allowed unprofitable tech firms to list their shares for the first time in China, particularly those involved in advanced technologies such as cloud computing, biotech, green energy, autonomous driving, and artificial intelligence.
On Tuesday, Shanghai announced new measures that would help promising new tech companies acquire financing. The Shanghai government also outlined plans to grant companies tax incentives apart from fast-tracking their IPO applications. Shanghai Financial Services Office deputy director, Li Jun, mentioned in a statement that it was their job to pave the way for promising tech companies to get their shares listed as soon as possible.
