Megvii, a leading facial recognition technology company based in China, is preparing to launch an initial public offering on the Shanghai stock exchange. The company is collaborating with CITIC Securities to finalize arrangements for the anticipated listing, as stated in a recent announcement from the China Securities Regulatory Commission on Tuesday.

This development follows over a year after Megvii, widely recognized for its computer vision platform Face++, initially sought to go public in Hong Kong in August 2019. Reports from Reuters at that time indicated the company aimed to secure between $500 million and $1 billion in funding. However, the company’s application for an IPO in Hong Kong has since expired for reasons that have not been publicly disclosed, and the company is now concentrating on the STAR board in Shanghai, a source familiar with the situation informed TechCrunch.

China introduced the STAR board in 2019 with the intention of attracting rapidly growing, albeit currently unprofitable, Chinese technology startups, after previously seeing them choose to list in the United States. Increasingly, a domestic listing is becoming more attractive to Chinese companies, particularly those reliant on government projects and those impacted by the ongoing technological competition between the U.S. and China.

Megvii, alongside its competitors SenseTime, Yitu, and CloudWalk, is collectively known as the “Four AI Dragons” of China, a testament to their significant market share and substantial investment from prominent investors. Megvii’s technology is utilized in numerous smart city projects throughout China and is integrated into a wide range of smartphones and mobile applications. Major investors including Alibaba, Ant Group, and the Bank of China have collectively invested approximately $1.4 billion in the company since its founding a decade ago.

These AI companies have received less recognition internationally. In the previous year, Megvii, Yitu, and SenseTime were placed on the U.S. Entity List due to allegations of their involvement in facilitating the government’s surveillance of Muslim minority populations in western China. CloudWalk was later added to this blacklist in 2020, resulting in the disruption of its access to U.S. suppliers.

According to the announcement from China’s securities regulator, Megvii intends to offer Chinese depositary receipts (CDRs), which function similarly to American depositary receipts and enable domestic investors to acquire shares in companies listed overseas. This indicates that the Beijing-based AI company has not completely dismissed the possibility of a listing outside of mainland China.

This week, Lenovo, a global leader in PC manufacturing and already listed in Hong Kong, also revealed plans to issue shares through CDRs on the Shanghai tech board.

Megvii is currently in the pre-application stage, seeking guidance, and its proposed listing remains subject to the approval of Chinese regulatory bodies.