Shares of Lightelligence, a Shanghai-based optical computing supplier, soared following their Hong Kong debut on Tuesday, as investors bet on the emerging technology easing computing bottlenecks facing artificial intelligence.

The company, formally known as Shanghai Xizhi Technology Co, closed at HK$886 ($113), up more than 383 percent from its initial public offering price of HK$183.2, giving it a market capitalization of about HK$81.5 billion.

Lightelligence raised net proceeds of HK$2.38 billion from the listing. About 70 percent of the funds will be used over the next five years to support research and development, including further work on its optical interconnect and optical computing businesses, the company said in a filing.

“The listing marks a new starting point,” Shen Yichen, the company’s founder and chairman, said at the listing ceremony. He pledged to increase investment in core technologies and expand the company’s product portfolio, so as to enhance its global competitiveness.

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Kenny Ng Lai-yin, a strategist at Everbright Securities International, told China Daily that the strong debut reflected investors’ confidence in the sector’s long-term prospects.

Although commercialization of optical computing products remains at an early stage, and Lightelligence has yet to generate meaningful revenue and profit, “investors value the company’s technological leadership in a high-barrier industry and bet on significant earnings upside once the sector achieves large-scale commercialization,” Ng said.

He added that buoyant sentiment in Hong Kong’s IPO market, particularly for companies related to AI and advanced manufacturing, also helped fuel the surge.

Lightelligence’s technology traces its origins to a 2017 paper by Shen, which “provided the first validation for using light to compute”. Consultancy Frost & Sullivan said it is the first company globally to achieve mass deployment of optoelectronic computing.

Traditional electronic systems face mounting constraints in cost, performance and energy consumption, intensifying the shortage of computing power in the age of AI, Frost & Sullivan said. Optoelectronic hybrid computing, by contrast, can lower computing costs and is emerging as an important direction for infrastructure upgrades.

Optical computing chips accounted for less than 0.5 percent of China’s AI inference chip market in 2025, but the figure is projected to rise to 20 percent by 2040, according to the consultancy. In its listing document, Lightelligence said it aims to capitalize on the growth trend while expanding its global market share.

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However, the overall performance of the Hong Kong stock market was weaker on Tuesday. The benchmark Hang Seng Index (HSI) edged down 0.95 percent to close at 25,679.78 points, while the Hang Seng Tech Index (HSTI), which tracks the city’s 30 largest listed technology companies, dropped 2.28 percent to 4,827.19 points.

“The lack of substantive results in US-Iran talks” has weighed on sentiment toward technology stocks, Ng said.

Moreover, the HSTI’s relatively limited exposure to pureplay AI companies could curb its ability to benefit from the global AI boom, Ng said, adding that weaker-than-expected financial results for 2025 released by major tech firms in the first quarter have also constrained the gauge’s performance.

“The HSI is likely to trade in a range between 25,000 and 26,300 points in the near to medium term, and will require greater clarity on the Middle East situation before breaking out,” he added.

Francis Kwok Sze-chi, vice-chairman of the Hong Kong Institute of Financial Analysts and Professional Commentators, said the HSI remains in a phase of consolidation.

After losing 2,200 points between March 2 and March 23 amid escalating tensions in the Middle East, the index rebounded by more than 2,300 points by April 21, erasing its decline in March, Kwok said.

This indicates that the impact of the geopolitical conflict has largely been absorbed by the market, but with the situation still fluid, investors’ willingness to deploy capital has yet to fully recover, he added.

Contact the writer at irisli@chinadailyhk.com