Zhongji Innolight, a winner of the US-China rivalry supplying AI data centre equipment to both countries, fell as much as 9.4 per cent in its Hong Kong debut on Thursday amid a global tech sell-off. The Shandong-based company, which makes optical transceivers and interconnects for fast data transfer between chips, priced its Hong Kong shares at HK$980 but dropped to HK$887.50. It raised HK$53.4bn ($6.8bn), with an option to reach $7.8bn, making it the second-largest Asian listing this year. Innolight already boasts a market capitalisation exceeding $145bn.

Major customers include Alphabet (22.4% of revenue), Amazon (11.8%), Alibaba (5%) and Huawei (1.9%). Its equipment is used in Nvidia GPU clusters. Innolight's Shenzhen shares have surged over 4,000 per cent since 2023, with net profit jumping from Rmb2.2bn to Rmb10.8bn last year. However, shares have fallen over 40 per cent from their June peak alongside global tech declines.

"The whole global narrative between AI software and AI hardware is oscillating a lot," said Jason Lui of BNP Paribas, noting recent rotation out of hardware. Yet demand from hyperscalers remains "quite robust, at least in the near term." Innolight plans to use proceeds for R&D, production expansion, supply chain resilience and strategic acquisitions. Goldman Sachs, CICC, Morgan Stanley and GF Securities sponsored the listing, with cornerstone investors including Temasek, Hillhouse's HHLRA, JPMorgan Asset Management and BlackRock.