HONG KONG -- With investors giving a warm welcome to the massive Hong Kong stock offering of Alibaba Group Holding, Chinese artificial intelligence startup Megvii Technology has decided to move ahead with its own plan to list in the city.
After filing for an initial public offering in August, Megvii put its plans on hold last month when the U.S. government put it on a blacklist of companies that American suppliers should avoid doing business with over its alleged involvement in the repression of Muslims in China's Xinjiang region.
Seeking to raise up to $1 billion, the company has now decided to seek a hearing with the Hong Kong Stock Exchange's listing committee this week, two people familiar with the plans said.
Another person familiar with the matter said the listing hearing could happen as early as Thursday. All three declined to be identified given that the information is not public.
The move comes as e-commerce company Alibaba's secondary listing in the territory, worth as much as $13.4 billion, drew a stronger-than-expected reception, the sources said. Bids have exceeded the shares on offer by several multiples, they added. If completed, Alibaba's deal will be the biggest equity raising in the region so far this year.
While companies typically make a stock market debut within a month of the listing hearing, Alibaba-backed Megvii, known for its facial recognition platform Face, could yet delay the IPO if markets turn turbulent or anti-government demonstrations in the city intensify, the sources said.
A representative for Megvii in Hong Kong declined to comment.
At a listing hearing, companies address any issues or concerns raised by the listing committee of the exchange. Once the committee approves the listing, the company can commence investor roadshows for the IPO.
Megvii raised $750 million in a funding round in May from investors including a unit of Bank of China (BOC) and Abu Dhabi Investment Authority, giving it a valuation of $4 billion.
Megvii had objected to being included in the U.S. blacklist and said any direct business impact from the move was expected to be "minimal." It also said there were no changes to its plans.
Megvii is among a list of companies hoping to tap Hong Kong's stock market despite five months of increasingly violent protests. After a summer lull, over $10 billion have been raised in Hong Kong, making it the busiest equity raising hub in the world, according to data from Dealogic.
Goldman Sachs, JPMorgan and Citigroup are joint sponsors of the IPO.
