AI and Chip IPOs Surge as Hong Kong Market Reawakens

Hong Kong’s IPO market is showing fresh signs of life as Chinese technology companies return with confidence. Strong first-day performances by three high-profile listings suggest investor appetite is rebounding after years of regulatory pressure and global market uncertainty.

The successful debuts also underscore Beijing’s push to accelerate domestic innovation in artificial intelligence and semiconductors sectors increasingly shaped by U.S.-China tech rivalry.

A strong opening bell for Chinese tech

Three Chinese technology firms made an upbeat debut on the Hong Kong stock exchange on Thursday, collectively raising HK$9.3 billion (about $1.19 billion). All three stocks opened above their offer prices, offering a positive signal for companies planning listings in the city this year.

The trio spans some of China’s most strategically important industries artificial intelligence, semiconductor design, and surgical robotics highlighting where both policymakers and investors see long-term growth.

Their early gains helped reinforce hopes that Hong Kong can build on last year’s recovery in new listings.

AI firm Zhipu AI posts modest but solid gains

Artificial intelligence developer Zhipu AI, formally known as Knowledge Atlas Technology, opened trading at a modest premium to its IPO price. Shares began 3.3% above their offer price of HK$116.20 and were trading around HK$116.40 during the session.

Spun out of Tsinghua University, Zhipu AI raised HK$4.35 billion in its offering, valuing the company at close to HK$51 billion. The firm has positioned itself as a key player in China’s fast-growing generative AI ecosystem.

According to its listing documents, most of the proceeds will be directed toward research and development, reflecting the capital-intensive nature of advanced AI model training.

Cornerstone investors included JSC International Investment Fund and JinYi Capital Multi-Strategy Fund, lending institutional credibility to the offering.

Semiconductor designer Iluvatar CoreX leaps ahead

Shanghai-based Iluvatar CoreX delivered one of the day’s strongest performances. Shares of the general-purpose GPU designer surged 31.6% above their offer price of HK$144.60, trading at around HK$169.40.

The company raised HK$3.48 billion, giving it an implied market capitalization of approximately HK$36.8 billion at listing. Iluvatar CoreX focuses on graphics processing units and AI accelerators technologies central to China’s efforts to reduce reliance on foreign chipmakers.

The firm has said it plans to channel most of its IPO proceeds into research across chips, accelerators, and supporting software platforms.

Surgical robotics firm Edge Medical jumps over 36%

Shenzhen Edge Medical, a surgical robotics company, recorded the biggest first-day jump among the three listings. Its shares climbed 36.4% above the offer price of HK$43.24, trading at roughly HK$55.50.

The company raised about HK$1.12 billion, with plans to invest in product development, commercialization, manufacturing expansion, and potential strategic acquisitions.

Its cornerstone investors included heavyweight names such as the Abu Dhabi Investment Authority, OrbiMed, UBS Asset Management Singapore, and Tencent-backed Huang River Investment, underscoring global interest in China’s medical technology sector.

Policy tailwinds behind the listings

The successful debuts come against a backdrop of policy support from Chinese authorities, who are moving to fast-track listings in artificial intelligence and semiconductor-related sectors.

Beijing has identified both industries as critical to national technological self-sufficiency, particularly as U.S. export controls limit access to advanced chips and manufacturing equipment.

This policy direction has encouraged a growing pipeline of tech issuers to pursue public listings, either in Hong Kong or on mainland exchanges.

More IPOs waiting in the wings

Several notable technology companies are preparing to follow a similar path. Huawei’s AI server spin-off, xFusion, has hired Citic Securities to begin preparations for a mainland IPO, according to earlier reporting by Reuters.

Memory chipmaker ChangXin Memory Technologies and Baidu’s AI chip subsidiary Kunlunxin are also planning public offerings, further expanding the universe of domestic tech champions seeking capital market support.

In Hong Kong specifically, the pipeline remains active. Chinese AI firm MiniMax Group and chipmaker OmniVision Integrated Circuits are scheduled to begin trading on Friday, potentially extending the positive momentum.

Measuring Hong Kong’s IPO comeback

The market’s response to Thursday’s debuts will be closely watched as a gauge of whether Hong Kong can sustain last year’s IPO revival.

In 2024, the city raised $37.2 billion from 115 new listings the strongest annual performance since 2021 according to data from LSEG as of January 5.

While global interest rates, geopolitical risks, and China’s economic outlook remain key variables, early-year performance suggests that investor confidence is stabilizing, particularly for companies aligned with national strategic priorities.

What this means for investors and issuers

For investors, the listings offer exposure to sectors expected to see long-term policy and funding support, though valuations and execution risks remain important considerations.

For issuers, the strong first-day performances reinforce Hong Kong’s appeal as a capital-raising hub that bridges mainland innovation and global capital.

If momentum continues, 2025 could mark a more durable reopening of the city’s IPO market after several years of subdued activity.

Looking ahead

The early success of these three listings does not guarantee a smooth year ahead, but it sets a constructive tone. As China accelerates investment in AI, chips, and advanced manufacturing, capital markets are once again becoming a key channel for funding that ambition.

Whether Hong Kong can convert this optimism into sustained deal flow will depend on broader market conditions but for now, the city’s IPO engine is clearly warming up.

(With inputs from Reuters.)

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