On June 21, Cailian Press (editor Hu Jiarong) reported that due to the impact of discounted placement, SenseTime-W (00020.HK) fell more than 6% at one point during the day, but has now narrowed significantly. As of the time of publication, the company fell 0.76%, reporting HKD 1.31.

According to the pre-market announcement today, SenseTime and the placement agent entered into a placement agreement, in which the placement agent has agreed to use its best efforts and certain conditions to encourage no less than six subscribers to purchase 1.673 billion shares of placement shares. The placing price is HKD 1.20 per share, a 9.1% discount to yesterday's closing price. With this placement, it is expected to raise approximately HKD 2.008 billion.

If the placement is successfully completed, SenseTime Technology expects to receive approximately HKD 2.008 billion from the placement. After deducting placement commissions, related costs and expenses, the net proceeds are expected to reach HKD 1.995 billion. Based on this calculation, the net issue price of placement shares is approximately HKD 1.19 per share.

It is worth noting that SenseTime announced a lock-up commitment in the announcement, which stipulates that from the date of the placement agreement to 90 days after the completion of the placement (or a shorter period agreed by both parties), the company may not engage in the following actions without the written consent of the placement agent:

Issue, allot, issue or tender equity securities of the company, or grant any purchase rights, rights or subscription warrants.

Enter into a swap or similar agreement that may transfer share economic risks: publicly announce any transaction that may violate the above terms. Except for the issuance and placement of shares, equity incentives granted in accordance with equity incentive plans, and new class B shares.

SenseTime's large model once attracted market attention

In addition to the discounted placement, SenseTime's recent performance is also worth watching. After the company released the DailyNew 5.0 large model on April 23 this year, the company's stock price rose a total of 176.67% in seven trading days.

According to public information, the DailyNew 5.0 large model uses a hybrid expert model method to make the large language model able to more accurately understand the context in a specific industry, and uses more than 10TB of text data units and high-quality synthetic data for training. It aims to make the model have outstanding performance in the Chinese environment.

Earlier research reports by Haitong International pointed out that the company's value was severely underestimated. Considering the scarcity of available computing power infrastructure, and based on the fact that the company's growth in current asset value is mainly driven by generative AI business, and considering that there is still a gap between the company's AI infrastructure and large models that generate profits at the corporate level. In addition, they gave the company a 2 times asset net profit for the 2023 fiscal year, corresponding to a target price of HKD 1.5 per share.