FAST NEWS: SenseTime plummets on founder’s sudden death

The latest: China’s leading artificial intelligence (AI) company SenseTime Group Inc. (0020.HK) announced Sunday its founder and executive director Tang Xiao’ou passed away on the evening of Dec. 15 at the age of 55 due to health issues.

Looking up: The company said its Executive Chairman and CEO Xu Li, Executive Director and Chief Scientist Wang Xiaogang, and Executive Director Xu Bing, along with other directors and the management team, will continue to lead the company, and believes that the passing of Tang will not have a material adverse impact on the daily management and the ordinary business activities of the company.

Take Note: According to the company’s “weighted voting rights” structure, Tang held Class A shares, which accounted for about 70% of the voting rights of SenseTime. With his passing, his voting rights will be ceased in accordance with the regulations, and thus the company will lose its controlling shareholder with absolute control.

Digging Deeper: Of China’s top four AI companies, SenseTime stands above its three biggest rivals in computer vision artificial intelligence (AI). The company provides its technology to government and enterprise customers for applications like smart cities, surveillance and autonomous driving. Despite facing delays after it was blacklisted by the U.S. government as a “Chinese military enterprise,” the company finally made an IPO in December 2021.However, the comapny has been unprofitable since its inception in 2014 due to huge R&D expenses, and its share price has been going down since listing, with the latest share price having dived more than 71% from its IPO price of HK$3.85.

Market Reaction: SenseTime’s shares dropped Monday morning and were down 11.9% to $1.11 by the midday break, hitting a historic low since its IPO.

Translation by A. Au

Have a great investment idea but don’t know how to spread the word? We can help! Contact us for more details.

To subscribe to Bamboo Works weekly free newsletter, click here