Key facts
- Ligent Technologies shares jumped as much as 19.2% in their Hong Kong debut on Tuesday.
- The company raised HK$5.67 billion ($723 million) in its IPO.
- Ligent makes optical transceivers, chips, and network terminals used in AI data centers.
- Cornerstone investors include Primavera Investment Fund and GigaDevice.
- Ligent posted a 29.7% increase in net profit to 661 million yuan for the six months ended June 30.
- Hisense Group Holding will retain about 40.1% of Ligent after the offering.
Shares of Chinese fiber-optic communications equipment maker Ligent Technologies jumped as much as 19.2% in their Hong Kong debut on Tuesday, raising HK$5.67 billion ($723 million) by tapping into investor demand for artificial intelligence-related equipment. The stock reached a high of HK$39.3 before trading at HK$35.90, an 8.9% increase, as the broader Hang Seng Index rose 0.3% and the Hang Seng Tech Index climbed 0.6%.
Ligent manufactures optical transceivers, chips, and network terminals. Its transceivers are crucial for converting data into light signals for rapid transmission through fiber-optic cables, a technology vital for AI data centers that require high-speed links between servers and switches.
Ke Yan, head of research at Singapore-based Shenton Research, noted Ligent's vertical integration in optical module manufacturing as a positive, despite its current shipments being concentrated in lower-end products. However, he cautioned that the high valuations for AI supply chain players are predicated on exponential growth, and any deceleration could lead to a de-rating.
The company sold 172.01 million shares in its base offering, giving it a market value of approximately HK$32.4 billion at the offer price. Cornerstone investors, including Primavera Investment Fund, GigaDevice, and Amlogic Hong Kong, participated in the offering. The public offering was subscribed 35.16 times, and the international offering was subscribed 4.67 times.
Ligent plans to allocate about 52.9% of the net proceeds to research and development for faster optical products and chips, and 25.1% to expand production capacity. For the six months ended June 30, the company reported a 29.7% increase in net profit to 661 million yuan ($98.7 million) and a 27.9% rise in revenue to 5.39 billion yuan compared to the same period a year prior. Hisense Group Holding is expected to maintain control of approximately 40.1% of Ligent following the offering.