China AI supply-chain IPOs hold firm despite valuation pullback, Citi says
FXI•Chinese AI supply-chain companies are expected to continue listing in Hong Kong despite valuation concerns, Citi's head of China investment banking said. Hong Kong saw 118 IPOs raise HK$388 billion ($49.4 billion) in the first nine months of the year, up 106% year on year.
1. Hong Kong IPO outlook
Citi's head of China investment banking, Simon Yuan, said Chinese AI supply-chain listings in Hong Kong are expected to continue despite recent valuation pullbacks in data center companies, largely originating in the U.S. He said demand for Chinese listings is split roughly evenly between domestic and international investors, with mainland Chinese southbound capital emerging as a key buying force.
2. Shifting areas of focus
Yuan warned that a turn in the U.S. AI cycle would affect markets everywhere, including Hong Kong. Chinese hardware suppliers have benefited from the global AI infrastructure boom through sales-volume growth and higher unit prices, while manufacturing footprints outside mainland China help them serve global clients and mitigate geopolitical friction. He expects Hong Kong's equity capital markets to shift next year from hardware toward Chinese AI models and application developers, which he said need proven business models, strong growth and profitability.
3. IPO fundraising figures
A total of 118 firms went public in Hong Kong in the first nine months of the year, raising HK$388 billion ($49.4 billion), up 106% year on year.
