Zhongji InnoLight ends Hong Kong debut down 2%

Zhongji InnoLight shares ended their Hong Kong debut down 2 percent at HK$960 on Thursday, after briefly falling as much as 10 percent in the city’s biggest public offering for seven years.

The Chinese artificial intelligence data centre supplier priced its Hong Kong shares at HK$980 and raised about HK$53.4 billion, or US$6.8 billion. The listing was Hong Kong’s largest since Alibaba listed in the city in 2019.

Zhongji InnoLight, also listed in Shenzhen, makes optical transceivers used to move large amounts of data in AI data centres. It has supplied companies including Google, Nvidia and Huawei.

The US Department of Defense blacklisted Zhongji InnoLight in June alongside other Chinese companies over alleged military ties. The company rejected the allegation in its Hong Kong stock exchange filing, saying it had “not engaged in any military-related businesses or activities”. It also warned investors that the blacklist “may subject us to increased scrutiny and potential further government actions”.

More than half of Zhongji InnoLight’s revenue last year came from the United States, while China accounted for less than one-tenth, according to the company filing.

The company said its sales had benefited from rising global investment in AI infrastructure and that it would use the listing proceeds to increase production capacity and strengthen supply chain resilience. It has production facilities in China, Thailand and Taiwan.

Poe Zhao, founder of analysis publication Hello China Tech, said the timing of the listing showed “a growing tension between commercial integration and regulatory scrutiny”. He said the company was important because large AI clusters depend on moving data efficiently between processors.

Nomura analysts said in a July 6 note that Zhongji InnoLight was expected to maintain about a 30 percent share of the global AI transceiver market in coming years because of its research and supply chain management.