Korean investors snap up Zhongji Innolight H-shares worth $43.4 million

Korean investors net bought $43.4 million of Zhongji Innolight H-shares in seven trading days, the most of any Hong Kong stock, as retail money favored AI data-center infrastructure over China's memory self-sufficiency drive.

"As AI server performance improves, demand for next-generation optical networking equipment capable of transmitting data faster and more efficiently will grow more quickly than expected," Goldman Sachs said, describing Zhongji Innolight as "a key beneficiary of expanding AI infrastructure investment."

Korea Securities Depository data show buy settlement of $45.07 million and sell settlement of $1.67 million between July 8 and Aug. 7, netting $43.39 million, or about HK$340 million. The runner-up, Tianrui Automotive Interiors, drew $11.02 million, while the ChinaAMC CSI 300 ETF took in $9.54 million. Zhongji Innolight's H-shares listed July 30.

The demand shows international appetite for the AI optical-module maker's dual listing and could support liquidity and valuation as global data-center spending accelerates.

Why AI infrastructure beat memory self-sufficiency

Korean investors split their bets on China's AI sector after two landmark listings. Zhongji Innolight, which makes optical transceivers that move data between AI chips and servers, held a 21.2 percent share of the global optical interconnect solutions market last year, ranking first, according to research firm LightCounting. About 60 percent of its revenue comes from the United States, tying earnings directly to data-center expansion by Nvidia and Meta.

By contrast, CXMT, the Chinese memory chipmaker that listed on Shanghai's STAR Market on July 27 and surged as much as 470 percent on debut, drew $16.71 million in net Korean purchases over the same stretch — less than half of Zhongji Innolight's total. CXMT is a bet on China building a homegrown DRAM industry independent of Samsung Electronics and SK Hynix, but analysts said it is not yet competitive in high-bandwidth memory, the type central to AI chips.

"Even if CXMT continues its aggressive capacity expansion, it will not directly clash with the core customer base of Samsung Electronics and SK Hynix," said Kim Dong-won, head of research at KB Securities. Park Ju-young, a researcher at Kiwoom Securities, said the CXMT listing would accelerate China's semiconductor localization and lift earnings at domestic materials and equipment suppliers.

Accessibility also played a role. Zhongji Innolight has traded on the Shenzhen Stock Exchange since 2012, but its Hong Kong listing made direct investment straightforward for Korean retail investors. CXMT's STAR Market shares remain hard to access directly, prompting Park Su-jin, a researcher at Mirae Asset Securities, to recommend related ETFs as "a realistic alternative for investing in Chinese semiconductors."

A debut that drew global retail money

Zhongji Innolight's H-shares fell 6.94 percent to HK$1,033 on Aug. 10, while its A-shares dropped 6.01 percent to 864.58 yuan. Goldman Sachs more than doubled its price target for the company, citing expectations that demand for high-performance optical transceivers will accelerate as data centers grow more sophisticated.

The top 10 most-bought Hong Kong stocks by Korean investors drew combined net purchases of about $96.27 million over the period, with Zhongji Innolight contributing nearly half. The flows show how global retail money is pricing AI infrastructure growth ahead of China's semiconductor localization timeline.

This article is for informational purposes only and does not constitute investment advice.