(Yicai) Aug. 8 -- Shares of Black Sesame Technologies, China’s first autonomous driving chip stock, plunged on its first trading day on the Hong Kong Stock Exchange.

Black Sesame [HKG: 2533] was trading down 20.4 percent at HKD22.30 (USD2.86) as of 2.40 p.m. in Hong Kong today, after earlier dropping as much as 34 percent. It offered 37 million shares at a price of HKD28 in its initial public offering.

Founded in 2016, Black Sesame is one of China’s major intelligent driving chipmakers. Its primary business is autonomous driving, and its main products are the Huashan ultra-high performance system on a chip series and the Wudang cross-domain SoC series.

Black Sesame’s investors include Xiaomi, Tencent Holdings, Geely Holding Group, SAIC Motor, Northern Light Venture Capital, Oceanpine Capital, and SummitView Capital. GAC Group’s unit Qicheng Development and the US subsidiary of Joyson Electronic are among Black Sesame’s cornerstone investors.

Black Sesame expects that, after the IPO, its founder, Chairman, and Chief Executive Shan Jizhang will become the company’s largest shareholder by holding the voting rights of about 21.7 percent of the issued shares.

The self-driving chip market has great potential thanks to the intelligentization trend of the automotive sector, said Black Sesame. However, it is difficult for smart-driving chipmakers to achieve mass production and get enough orders to cope with the fierce market competition.

In the past three years, Black Sesame’s revenue increased, but losses widened to nearly CNY10 billion (USD1.4 billion), the company noted, adding that it expects to log adjusted net losses and operating losses this year and next year.

The fierce market competition is forcing chipmakers to compete in chip design capabilities and cut hardware costs. Black Sesame’s development model is not very different from its peers, smart driving expert Cheng Zengmu told Yicai, adding that the company has a long way to go before it can tackle the competition and achieve fast growth.

Editor: Futura Costaglione