Chinese AI supply chain companies are expected to maintain their listings despite valuation concerns and increased scrutiny, according to Citi's head of China investment banking, Simon Yuen. He noted that a balanced split between domestic and international demand, supported by local liquidity and southbound capital, cushions the market. Yuen warned of potential impacts if the US AI cycle turns volatile.
Chinese AI supply chain companies are a significant part of the global AI infrastructure boom, and their ability to continue listing and raising capital in Hong Kong impacts the broader tech sector and investor sentiment towards Chinese technology firms.
Listings of Chinese AI supply chain companies are expected to remain resilient despite rising valuation concerns and increased scrutiny, according to Simon Yuen, Citi's head of China investment banking. He noted that a balanced split between domestic Chinese and international demand, supported by local liquidity and southbound capital from mainland China, cushions the market. Yuen warned that significant volatility in the US AI cycle could impact Hong Kong listings. Chinese hardware suppliers have benefited from the global AI infrastructure boom, experiencing sales volume growth and higher unit prices, partly due to establishing manufacturing footprints outside mainland China to better serve global clients and mitigate geopolitical friction. For next year, Hong Kong's equity capital markets are anticipated to shift focus from pure hardware to Chinese artificial intelligence models and application developers, provided these companies demonstrate strong growth and profitability.
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