China's Siri Plunges as Trump Casts Wider Net Over Tech Firms
(Bloomberg) -- Voice-recognition company Iflytek Co. plunged following news it is on a list of Chinese technology firms that may face restrictions from the U.S.
Iflytek, which says it controls over 70% of China’s speech technology market, slid as much as 8.2% in Shenzhen after people familiar with the matter said the U.S. is considering curbs on the company, as well as Xiamen Meiya Pico Information Co. and Beijing Megvii Co., which is unlisted. Data firm Xiamen Meiya dropped by the 10% daily limit in Shenzhen.
Iflytek hasn’t received official notification from the U.S. about any curbs, board secretary Jiang Tao wrote in a posting on Securities Times-affiliated website egsea.com. The company hopes to receive “fair and just treatment” and has contingency measures and substitutes for components sourced overseas, he said, adding that even if the reports are true, there won’t be a major impact on operations.
Anhui-based Iflytek makes voice-recognition software similar to Apple Inc.’s Siri system and says it is committed to enabling machines to listen, speak, understand and think. China Mobile Communications Group Co. is its top shareholder with a 12.85% stake.
The Trump administration is broadening its attack on companies linked to China’s vast surveillance network, after initially tackling Huawei Technologies Co. Two security camera giants -- Hangzhou Hikvision Digital Technology Co. and Zhejiang Dahua Technology Co. -- were brought into the scope Wednesday, sending their shares down more than 9% during the day. They extended declines Thursday.
Iflytek has a market value of 65.81 billion yuan ($9.53 billion) and a 0.5% weighting on the Shenzhen Composite Index, where it listed in 2008. Its shares are down 26% from a March high, though they are still firmly up this year. Overseas investors own 2.35% of the company via the trading link with Hong Kong, according to exchange figures as of May 22.
The Shenzhen Composite Index fell 2.4% Thursday, closing at the lowest since Feb. 22. Hikvision was the biggest drag on the gauge, while Iflytek also weighed as it finished with a 7% decline.
--With assistance from Zheping Huang.
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