Seyond survives marathon journey to Hong Kong listing

The maker of autonomous driving sensors has completed a backdoor SPAC listing nearly a year after signing a merger agreement for the deal

Key Takeaways:

• Seyond has become only the third firm to successfully go public in Hong Kong using the stock exchange’s 4-year-old SPAC listing program
• The milestone came nearly a year after the maker of sensors used in autonomous driving signed its deal to merge with a special purpose acquisition company

By Warren Yang

Patience is a virtue — certainly for companies seeking backdoor listings in Hong Kong using the stock exchange’s 4-year-old special purpose acquisition company (SPAC) mechanism.

Last Wednesday, Seyond Holdings Ltd. (2665.HK) — a U.S.-based maker of light detection and raging (LiDAR) sensors, key components for autonomous driving — became only the third firm to successfully go public in Hong Kong through a merger with a SPAC, a process known as de-SPAC. And it’s no understatement to say that the journey for the company was long and arduous, even as SPAC listings are often described as faster and easier than conventional IPOs.

The company reached the milestone almost exactly a year after signing a deal to merge with a SPAC named TechStar Acquisition Corp. Such companies are basically shells with no real business and simply serve as vehicles for real companies to go public by inheriting their listing status through reverse mergers, bypassing many of the cumbersome requirements for traditional IPOs. SPAC deals have boomed in the U.S. by luring cash-strapped businesses, especially tech startups, with their relatively hassle-free and less expensive process.

Seyond originally planned to list in the U.S. in 2023 but decided to try its luck in Hong Kong through the stock exchange’s SPAC-listing program rolled out at the beginning of 2022.

That shift probably wasn’t a difficult choice for Seyond as the regulatory climate in the U.S. towards China-linked companies was growing increasingly hostile amid rising tensions between Washington and Beijing. Technology has become an especially sensitive area as concerns about national security add to the U.S.-Sino economic rivalry.   

All this made the pursuit of a U.S. listing undesirable for Seyond. The company was probably hoping for an easy ride when it turned to Hong Kong instead, even though the trip turned out to be quite the opposite.

While SPAC listings are supposedly easier than traditional IPO, the reality in Hong Kong has been far different because of regulatory hurdles. For starters, all Chinese companies seeking to go public overseas, including in Hong Kong, must secure approval from mainland authorities, both for SPAC listings and traditional IPOs. On top of that, those that opt for the SPAC route in Hong Kong are subject to a strict vetting process intended to protect investors from companies that might not meet the exchange’s strict listing standards.

Seyond technically isn’t based in China, but still falls under the purview of the Chinese securities regulator because it gets most of its business in the country. The company received the green light from the China Securities Regulatory Commission (CSRC) for its Hong Kong listing only in October, 10 months after it signed its merger deal with TechStar. The following month, the company passed its listing hearing with the Hong Kong Stock Exchange.

The stock exchange only completed its first de-SPAC merger in October last year, nearly three years after the launch of its SPAC program at the start of 2022. That deal, involving Singapore-based e-commerce company Synagistics (2562.HK), moved relatively quickly, crossing the finish line just four months after the signing of a SPAC merger agreement.

But traffic on Hong Kong’s SPAC lane has moved slowly since then. The only other company to complete a similar merger before Seyond was ZG Group (6676.HK), which also got a lesson in waiting during its listing journey. The operator of a steel trading platform struck what was Hong Kong’s first-ever SPAC deal as early as 2022, but only finally became a listed company in March this year.

Red flags

It’s not clear exactly why it took so long for Seyond to get its regulatory approvals, first from the Chinese securities regulator and finally from the Hong Kong Stock Exchange. But from a purely investment perspective, there are some red flags around the company.

Chief among those is its revenue growth, which is fizzling. Last year, Seyond’s sales increased 32% to $160 million, which looks good at first glance, but marks a sharp slowdown from 83% growth in 2023, according to a prospectus filed by TechStar in August. Worse yet, the company’s revenue actually shrank year-on-year in the first quarter of 2025. And Seyond is unprofitable. It reported widening annual losses every year from 2022 through 2024, though it turned a gross profit and trimmed its net loss in the first quarter of this year.

Second’s ability to grow its revenue, control costs and ultimately turn a profit is hamstrung by fierce competition. The company is the fourth largest among LiDAR makers in China with a market share of about 21%, according to third-party data filings by TechStar. Its position is shakier in the global market, where it holds 8.4% share. This means that Seyond is competing with a handful of other major manufacturers, each fighting for industry supremacy while trying to keep numerous up-and-comers at bay, often by cutting prices.

Seyond’s choice of technology doesn’t help matters either. It focuses on 1,550-nanometer LiDAR systems, which offer longer range and stronger resistance to interference but are much costlier to make than the 905-nanometer technology used by larger competitors Hesai (HSAI.US; 2525.HK) and Robosense (2498.HK). That technological difference has given the two rivals much better gross margins than Seyond.

Perhaps as part of efforts to improve its margins, Seyond showcased a 905-nanometer product at the Consumer Electronics Show (CES) in Las Vegas early this year, only to get sued by Hesai in October over allegations of patent infringement. Such actions highlight the legal risks for companies in patent-heavy industries like autonomous driving technology.

Nonetheless, Seyond shares have jumped some 75% since their official debut on Dec. 10. They currently trade at a price-to-sales (P/S) ratio of about 18 based on its 2024 revenue, well above 7.2 for Hesai’s Hong Kong-listed stock and 8.8 for Robosense.

Investors for now may be taking a glass-half-full approach to Seyond as it represents a new play on potentially promising autonomous driving technology. Also, newly minted SPAC listings often take time to settle after a merger’s completion, as investors become familiar with the new publicly listed company. As that happens, and reality sinks in as the company provides regular updates on its progress, the current euphoria may give way to disappointment.

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