BRIEF: Phancy Group raises $200 million for computing power expansion

AI application developer Phancy Group Co. Ltd. (6682.HK), formerly known as Fourth Paradigm, announced on Wednesday it plans to sell up to 38.8 million new Hong Kong-listed H-shares for HK$40.36 each, representing a discount of about 12% from the previous day’s close. The placement is expected to raise net proceeds of HK$1.56 billion ($199 million).

The new shares represent about 6.95% of the company’s total enlarged share base. The company expects to place the shares with six or more independent investors, none of whom will become a substantial shareholder.

Phancy said about 80% of the proceeds will be used to build AI computing infrastructure based on heterogeneous GPUs to support its API business. The remaining 20% will go toward global expansion and potential acquisitions, focusing on emerging areas such as embodied intelligence and smart devices.

Phancy Group reported revenue of 7.14 billion yuan ($1.05 billion) last year, up about 35.6% year-on-year. Its net loss narrowed to 26.27 million yuan from 269 million yuan a year earlier.

Shares of the company opened lower on Wednesday and were trading at HK$40.28 by the midday break, down 12.13%. The stock has gained about 16.7% over the past month.

By Lee Shih Ta

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