Key facts
- Zhongji Innolight aims to raise up to $7 billion in a Hong Kong IPO.
- The IPO could be the largest in Hong Kong in nearly seven years.
- The company supplies critical components for Nvidia servers.
- 33 cornerstone investors, including Temasek and BlackRock, have committed $3.45 billion.
- Zhongji Innolight was added to a U.S. Department of Defense list of 'Chinese military companies' on June 8.
Chinese optical parts maker Zhongji Innolight is aiming for Hong Kong's largest IPO in nearly seven years, seeking to raise up to HK$55.05 billion ($7 billion). The Shenzhen-listed company, which supplies critical components for Nvidia servers, is selling 54.5 million shares at a maximum price of HK$1,010 each. The deal's size could increase to HK$63.3 billion ($8.1 billion) if a 15% over-allotment option is fully exercised.
This offering would be Hong Kong's largest share sale since Alibaba Group's $12.9 billion listing in 2019 and would rank as Asia's second-largest listing this year, following Chinese chipmaker CXMT Corp's $8.6 billion IPO. Zhongji Innolight's pricing strategy, with a minimum lot requiring over HK$50,000, is seen as a move to create strong demand and ensure a solid debut on July 30.
The company has secured 33 cornerstone investors, including Singapore's Temasek, Hillhouse-linked HHLR Advisors, JPMorgan Asset Management, BlackRock, and Abu Dhabi Investment Authority, who will purchase shares worth $3.45 billion, representing about 49.1% of the base offering. Zhongji manufactures optical transceivers essential for data centers, cloud networks, and AI computing systems, a sector experiencing rapid growth as Chinese tech firms invest in AI infrastructure.
Zhongji reported significant financial growth, with revenue rising 60.3% to 38.24 billion yuan ($5.7 billion) in 2025 and net profit more than doubling. First-quarter 2026 revenue nearly tripled to 19.50 billion yuan. A substantial portion of its revenue, 57.3% in 2025 and 61.7% in Q1 2026, comes from U.S. customers.
Despite its business ties with U.S. companies, Zhongji was added to a U.S. Department of Defense list of "Chinese military companies" on June 8. While not an economic sanctions list, this designation could potentially impact its business due to export controls or escalating U.S.-China tensions. The company plans to use the IPO proceeds for research and development, global production expansion, and supply-chain enhancements. Banks involved in the deal could earn up to approximately $56 million in underwriting fees.