(Restores dropped word in paragraph 7 to make clear that it would be Asia’s second-largest listing)
By Kane Wu, Selena Li and Yantoultra Ngui
HONG KONG, July 21 (Reuters) – China’s Zhongji Innolight, a maker of optical transceivers, will launch a Hong Kong listing on Wednesday to raise at least $8 billion, three sources with direct knowledge of the matter said, putting it on track to be Asia’s second-largest listing this year.
The company will sell the shares at a price up to HK$1,010 ($128.81) each, two of the sources said. That price would represent a 13.2% discount to the company’s Shenzhen-listed stock’s closing price on Monday.
Zhongji had earlier discussed pricing the Hong Kong shares at a 15% to 20% discount to its Shenzhen stock, two sources said, before a sharp rally widened the potential discount and a recent market fall narrowed the gap between its mainland-listed shares and planned Hong Kong shares.
Its shares have jumped some 86.2% year-to-date.
The sources spoke on condition of anonymity as the information is confidential.
Zhongji Innolight did not immediately respond to requests for comment from Reuters.
LARGEST HONG KONG SHARE SALE SINCE ALIBABA
The deal will be Hong Kong’s largest share sale in nearly seven years since Alibaba Group’s $12.9 billion listing in 2019, and its listing will be Asia’s second-largest this year after Chinese chipmaker CXMT Corp’s $8.6 billion initial public offering on Shanghai’s STAR market.
Hong Kong new listings have raised $33.8 billion so far this year, the highest for the same period since 2021 and more than double the $16.4 billion raised a year earlier, LSEG data as of July 21 showed.
BENEFICIARY OF AI INFRASTRUCTURE DEMAND
Zhongji makes optical transceivers, small devices that turn electrical signals into light signals and back again. They help move large amounts of data through fibre-optic cables and are used in data centers, cloud networks and AI computing systems.
The United States was Zhongji’s largest market, accounting for 61.7% of revenue in the three months ended March 31 this year, its draft prospectus showed.
The deal comes as Chinese technology companies rush to fund expansion in artificial intelligence infrastructure, where China and the U.S. are racing to build faster data centers and computing networks.
The company plans to use the listing proceeds for research and development, global production expansion, supply-chain strengthening, acquisitions and investments and working capital, its draft prospectus showed.
Zhongji said in the prospectus it had been the world’s largest optical interconnect solutions provider by revenue for five straight years since 2021, citing consultant CIC.
Its revenue rose 192% to 19.5 billion yuan ($2.9 billion) in the three months ended March 31, while profit jumped 274% to 6.32 billion yuan, the prospectus showed. Its 2025 profit rose 116% to 11.58 billion yuan on revenue of 38.24 billion yuan.
($1 = 7.8412 Hong Kong dollars)
($1 = 6.7649 Chinese yuan)
(Reporting by Kane Wu and Selena Li in Hong Kong, Yantoultra Ngui in Singapore; Writing by Scott Murdoch; Editing by Christian Schmollinger and Jacqueline Wong)
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