Another Blacklisted Chinese Facial Recognition Firm Seeks Mainland IPO

Chinese artificial intelligence company Yitu Internet Technology Co. Ltd. indicated it’s planning a mainland IPO in a filing to the Shanghai securities regulator Tuesday, and making it the latest of China’s “AI quartet” to reveal listing plans.

In the Tuesday filing, Yitu said it had appointed Guotai Junan Securities to provide guidance for the listing but didn’t give any timeline. Yitu did not reply to Caixin’s request for comment.

Several of Yitu’s peers have looked to tap investor interest in the country’s burgeoning AI sector, which is led by Yitu, Megvii Technology Ltd., SenseTime Group Ltd., and Guangzhou CloudWalk Information Technology Co. Ltd.

Megvii and SenseTime each had an about 20% share of China’s highly contested $1.46 billion AI machine vision market last year, putting them ahead of CloudWalk and Yitu who have about half that share.

It was reported earlier this year that Alibaba-backed facial recognition specialist Megvii was considering a listing on Shanghai’s Nasdaq-like high-tech STAR Market after its Hong Kong listing plan fell apart.

SenseTime, backed by Japan’s SoftBank Group Corp. is also exploring a dual listing in Hong Kong and the mainland, according to people familiar with the matter.

An August CloudWalk filing to the securities regulator in Guangdong revealed it had appointed China Securities Co. Ltd. as its IPO advisor in August.

The four AI companies have more in common than listing plans. All have been placed on a U.S. economic blacklist over alleged involvement in human rights violations against Muslim minorities in China — which Beijing has denied.

But Washington’s sanctions seem to have had little impact on the companies’ bottom lines in the first half, with all reporting revenue growth as most of their major clients are domestic governments and businesses.

Founded in 2012, Yitu develops and provides facial recognition technology for various applications including security and business. Yitu has also stepped into the health care industry and last year released its self-developed cloud AI chip QuestCore.

The company’s controlling shareholders, co-founders Zhu Long and Lin Chenxi, hold 40.01% and 23.24% stakes, respectively. Yitu’s latest fundraising in March saw it secure $30 million from a round led by CR Capital Group and China Chengtong (Hong Kong) Asset Management. Its previous funding round in 2018 was worth $200 million.

Contact editor Joshua Dummer (joshuadummer@caixin.com)

Download our app to receive breaking news alerts and read the news on the go.