Chinese Tech Company Seyond Completes Hong Kong SPAC Listing After Year-Long Battle
American entrepreneurs take note: While Chinese companies navigate complex regulatory hurdles to go public, U.S. markets remain the gold standard for business freedom and innovation.
Seyond Holdings Ltd., a U.S.-based maker of autonomous driving sensors, finally completed its backdoor listing in Hong Kong last week, becoming only the third company to successfully use the territory's struggling SPAC program since its 2022 launch.
The marathon journey took nearly a year from deal signing to completion, highlighting the bureaucratic nightmare that awaits companies trying to navigate Chinese regulatory approval processes.
Red Tape and Red Flags
Originally planning a U.S. listing in 2023, Seyond pivoted to Hong Kong as tensions between Washington and Beijing made American markets less welcoming to China-linked companies. Smart move by our regulators to protect American investors from potential national security risks.
But the Hong Kong route proved no cakewalk. The company had to secure approval from mainland Chinese authorities first, then pass Hong Kong's strict vetting process. This double-layer of communist bureaucracy delayed the listing by 10 months after signing the merger agreement.
The numbers tell a concerning story for investors betting on this Chinese tech play:
- Revenue growth collapsed from 83% in 2023 to just 32% in 2024
- First quarter 2025 showed actual revenue decline
- Company remains unprofitable with widening losses
- Faces fierce competition in a crowded LiDAR market
Technology Battle Heats Up
Seyond competes in the critical autonomous vehicle sensor market, holding 21% market share in China but only 8.4% globally. The company's choice of expensive 1,550-nanometer technology puts it at a cost disadvantage against rivals using cheaper 905-nanometer systems.
When Seyond tried to compete with a 905-nanometer product, Chinese rival Hesai immediately sued for patent infringement. This highlights the cutthroat nature of China's tech sector, where intellectual property battles rage constantly.
Market Reality Check
Despite the red flags, Seyond shares jumped 75% since debuting December 10, trading at a hefty 18 times sales ratio, well above competitors Hesai (7.2x) and Robosense (8.8x).
This pricing suggests investors are paying premium prices for what amounts to a speculative bet on Chinese autonomous driving technology. American investors should remember that our domestic tech companies like Tesla continue leading the autonomous vehicle revolution without the regulatory uncertainties plaguing Chinese firms.
As reality sets in and quarterly reports provide regular updates on the company's struggles, current investor euphoria may quickly turn to disappointment. The free market has a way of correcting overvalued assets, especially when fundamental business metrics don't support inflated valuations.
The success of American capital markets in fostering innovation remains unmatched globally, even as foreign companies struggle through bureaucratic mazes to access public funding.