China’s autonomous driving chipmaker Black Sesame International (2533) is proposing to place new shares at a discount of nearly 12 percent to raise over HK$1.24 billion amid intensifying competition in the smart driving sector.
The startup plans to place 53.65 million new shares at HK$23.20 apiece, 11.79 percent lower than its closing price on Monday. These shares are equivalent to 8.55 percent of the expanded issued equity.
Black Sesame said the net proceeds will be used primarily to further support core technology research and development, which includes next-generation automotive self-driving chips. They will also be used to fund the development of end-to-end technologies as well as robotics and artificial intelligence.
Top Chinese electric vehicle manufacturers including BYD (1211) and Geely Automobile (0175) have announced plans to strengthen their AI models to speed up the progress of smart driving.
This is an enormous and costly undertaking; in early February, Shanghai-based autonomous driving startup Zongmu Technology was reported to have abruptly shut down its headquarters after defaulting on staff wages for months, partly citing the EV makers’ self-development efforts.
Earlier this week, Black Sesame projected that its net profit for 2024 would swing to at least 100 million yuan (HK$106.75 million) from a net loss of 485 million yuan in the year prior, thanks to the increasing demand for intelligent driving solutions and products.
The company’s share price stood at HK$25.60 apiece, down by 2.47 percent from the previous close. It once hit as low as HK$24.60 in the early trading hours.
THEMIS QI
