Beijing’s fourth paradigm sets Hong Kong IPO price at low end of range – source

Bull statues are placed in front of screens showing the Hang Seng stock index and stock prices outside Exchange Square in Hong Kong, China, August 18, 2023. REUTERS/Tyrone Siu/File Photo Acquire LICENSE RIGHTS

SYDNEY, Sept 21 (Reuters) – Chinese artificial intelligence startup Beijing Fourth Paradigm is expected to price its shares at HK$55.6 apiece, the low end of the price range, by HK$1.023 billion (U.S. 131 million dollars), a source with direct knowledge of the matter said.

The source spoke on condition of anonymity because the information is not yet public.

Fourth Paradigm, which declined to comment, was added to the U.S. “entity list” this year, meaning U.S. suppliers are banned from shipping U.S. technology there unless they can get a hard-to-get license received from the Ministry of Commerce.

Fourth Paradigm is selling 18.4 million shares in the IPO and has given investors a price range of HK$55.60 to HK$61.16 per share, according to its regulatory filings.

It is the second IPO this week to be priced at the lower end of the range, with Tuhu Car raising $145 million and the final price hitting rock bottom.

According to the filing, three key investors led by New China Capital Management subscribed to shares in Fourth Paradigm worth about $96.8 million, representing 70.6% of the IPO.

According to its website, Fourth Paradigm’s products were founded in September 2014 and are used in finance, retail, manufacturing, healthcare, power and energy, telecommunications, healthcare and other sectors.

According to the filings, Fourth Paradigm counts Goldman Sachs (GS.N), Sinovation, Haitong International Investment and a number of government-backed funds among its pre-IPO investors.

Reporting from Scott Murdoch in Sydney; Edited by Himani Sarkar and Alexander Smith

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Scott Murdoch has been a journalist for more than two decades, working for Thomson Reuters and News Corp in Australia. He has specialized in financial journalism for most of his career, covering the Asian equity and debt capital markets and Australian M&A. He is based in Sydney.