Zhongji Innolight Co dropped in its trading debut in the Hong Kong Special Administrative Region after raising HK$53.4 billion ($6.8 billion) in the city’s largest listing in seven years.
The company’s shares fell as much as 3.1 percent on Thursday. The company, which makes optical transceivers essential to the data center buildout, had priced its 54.5 million shares at HK$980 apiece, an 11 percent discount to the onshore-listed stock.
The Chinese mainland-listed shares declined as much as 5.1 percent.
Investors have turned more cautious as a rout in artificial intelligence stocks deepened amid concerns over lofty valuations and excessive spending. Innolight’s mainland-listed shares have fallen more than 30 percent from a peak in June after more than doubling from early April.
“Before July, global investors showed strong appetite for AI infrastructure ‘picks-and-shovels’ names like Innolight, leading to crowded positioning,” said Charlie Hong, founder and CIO of LOGOS Asset Management. “While the long-term story remains intact, near-term confidence has softened amid concerns over hyperscaler capex and technology timing.”
Innolight’s listing is the Hong Kong SAR’s biggest since technology giant Alibaba Group Holding Ltd’s $12.9 billion share sale in 2019. Along with other deals in the pipeline, it would also catapult the city’s listing proceeds to a six-year high.
Cornerstone investors — which get guaranteed allocation in the deal in exchange for holding the stock for at least six months — have agreed to buy $3.45 billion worth of Innolight shares. They include Singaporean state-owned investor Temasek Holdings Pte, as well as asset managers Hillhouse Investment, JPMorgan Asset Management and BlackRock Inc.
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The company’s offering in the HKSAR was 16.84 times covered, with the international portion 9.73 times subscribed. In a sign of strong demand, the company stopped taking orders from institutional investors a day earlier than expected on Friday.
The company plans to use proceeds from the offering for research and development, expanding its production capacity, enhancing its supply chain, acquisitions, investments and working capital. Its revenue climbed to 19.5 billion yuan ($2.9 billion) for the first three months of 2026.
Still, some analysts remain concerned about the company’s growing exposure to the US market and high customer concentration. Its top clients include Alphabet Inc., Amazon.com Inc. and Meta Platforms Inc., which together accounted for about 40 percent of revenue, according to Bloomberg-compiled data.
“US revenue exposure rose to 61.7 percent in the first quarter of 2026, leaving the company vulnerable to geopolitical and export-control risks that could affect orders and valuation,” SDIC Securities analyst Wang Yang wrote in a note.
