On a summer morning in Central, a trading floor fell quiet as a newly listed name opened well below the price bankers had set the night before. The screens told a familiar story for a certain kind of technology company.
Black Sesame Technologies, a maker of chips for smarter cars, had just become the second firm to list in Hong Kong under the exchange's dedicated route for specialist technology businesses. Investors were being asked to pay for a company with almost no profit and a long road to it.
The debut was rough. The stock closed its first session well under the offer price, a reminder that Hong Kong's rules now let money-losing chip firms raise public capital — but not that buyers will always show up.
Black Sesame priced its offering at HK$28 per share on 8 August 2024 and raised about HK$1.04 billion, roughly US$133 million at the fixed rates used here, by issuing 37 million shares (HKEX Chapter 18C listing data; company announcement). It was the first chip company to use the exchange's 18C route and earned the label "China's autonomous-driving chip first stock (国产智驾芯片第一股)."
Key takeaways
- Black Sesame listed in Hong Kong on 8 August 2024 under HKEX's Chapter 18C for specialist tech firms. (HKEX)
- It raised HK$1.04 billion (about US$133 million) at HK$28 per share, issuing 37 million shares. (HKEX, company)
- Shares closed the first day at HK$20.45, down 26.96% from the offer price. (exchange data)
- Revenue rose from 60.5 million yuan in 2021 to 312 million yuan in 2023. (company disclosure)
- Cumulative net losses from 2021 to 2023 were roughly 10 billion yuan (US$1.4 billion). (company disclosure)
A new door for loss-making chip firms
Hong Kong added Chapter 18C to its listing rules to let pre-revenue and pre-profit deep-technology companies raise capital without the track record normally required. Black Sesame was the second name through that door, after a drug-discovery firm in June 2024, and the first semiconductor business to use it (HKEX).
The route matters because mainland exchanges impose stricter profitability tests that many AI and chip startups cannot meet. For a company like Black Sesame, 18C was less a victory lap than a financing necessity: it needed public money to keep building automotive-grade silicon while losses mounted.
The firm was founded in 2016 by Shan Jizhang and Liu Weihong, both Tsinghua University alumni, and builds a system-on-chip (SoC / 系统级芯片) for vehicles. Its two product lines are the Huashan (华山) high-compute series and the Wudang (武当) cross-domain series, designed to handle driving, cockpit, and connectivity tasks inside a car.
The numbers behind the listing
The offering itself was modest in size but rich in signal. Key figures from the company's disclosure and the exchange:
- Offer price of HK$28, the low end of a HK$28 to HK$30.30 range, suggesting tepid demand.
- 37 million shares sold, for gross proceeds of HK$1.04 billion and net proceeds of about HK$951 million after listing expenses.
- Roughly 80% of the proceeds earmarked for research and development over the following five years (company disclosure, reported by Chinese financial media).
- A long list of backers from ten prior funding rounds, including Xiaomi, Tencent, Geely, and SAIC.
The underwhelming price range and the first-day drop point the same way: investors wanted a discount for the risk of a firm that had not yet proven it could earn.
Why investors hesitated
The hesitation is understandable once the financials are laid out. Black Sesame's revenue was real but small, and its losses were large:
- Revenue is real but small: 312 million yuan in 2023, about US$43.9 million.
- Losses are large: cumulative net losses of roughly 10 billion yuan (US$1.4 billion) across 2021 to 2023.
- Margins are volatile: gross margin slid from 36.1% in 2021 to 24.7% in 2023, then jumped to 60.9% in the first quarter of 2024 as product mix changed.
Research spending tells the same story of a firm buying its future with cash it does not yet generate. R&D rose from 595 million yuan in 2021 to 1.362 billion yuan in 2023, a sum larger than the entire top line that year. For a public investor, the question was never whether the technology was interesting, but whether the path to self-funding was short enough.
The competitive field is crowded. Automotive-grade AI chips are contested by both global suppliers and a wave of domestic designers, all chasing the same carmakers' demand for in-car compute (算力). A 27% first-day fall suggests the market priced in that competition rather than the headline of a "first stock" distinction.
Honest limitations
The three-year loss figure includes accounting charges common to pre-IPO firms and may overstate true cash burn. Post-listing financials have moved since the debut; this piece anchors on the offering and the 2021 to 2023 disclosure, not later quarters. The first-day drop reflects a single trading session, not a full verdict on the underlying business. Currency figures use fixed rates of 7.1 yuan to the US dollar and 1.1 yuan to the Hong Kong dollar.
What readers can do now
- Investors: watch Black Sesame's quarterly revenue and gross margin, the two metrics that decide whether the 18C bet works.
- Operators: study the 18C route if you run a loss-making deep-tech firm seeking public capital outside mainland exchanges.
- Researchers: track automotive-grade AI-chip adoption rates as the real test of whether demand can catch up to supply.