Hong Kong AI stocks surge 7.8% as Innolight listing fuels rally

Hong Kong-listed artificial intelligence stocks rallied Monday, with Minglue Technology leading gains after Zhongji Innolight received regulatory approval for what could be the city's biggest listing since 2019.

"The AI supply chain is the dominant theme driving capital flows into Hong Kong equities this year," said Kevin Ip, equity strategist at Edgen. "The Innolight deal validates investor appetite for AI infrastructure plays and lifts sentiment across the sector."

Minglue Technology (02718.HK) jumped 7.80%, while Montage Technology (08609.HK) advanced 6.04%. Deepoint Technology (01384.HK) rose 4.98% and Tianshu Zhixin (09903.HK) gained 4.98%, according to exchange data. The coordinated move came as Zhongji Innolight, a Shenzhen-traded maker of optical transceivers used in AI data centers, secured approval from both China's securities regulator and the Hong Kong stock exchange for its listing, which could raise as much as $8 billion.

The deal would be Hong Kong's largest since Alibaba Group Holding Ltd.'s $12.9 billion listing in 2019, according to data compiled by Bloomberg. Innolight's shares have rallied 454% in Shenzhen over the past year, fueled by the AI boom and its supply relationships with Nvidia Corp., Alphabet Inc. and Meta Platforms Inc. The company is planning to start taking orders as soon as this week, people familiar with the matter said.

AI supply chain fuels Hong Kong IPO boom

Hong Kong has emerged as a primary beneficiary of the global AI infrastructure buildout, with first-time share sales in the city raising about $35 billion this year, already near the total for all of 2025. Other sizable offerings in the pipeline include optical transceiver manufacturer Eoptolink Technology Inc., which is preparing to raise as much as $5 billion, and fast-fashion retailer Shein Global Holdings Ltd., nearing an IPO of up to $3 billion.

The surge in AI concept stocks Monday reflects a broader rotation into technology names tied to data center spending. Goldman Sachs Group Inc., China International Capital Corp., Morgan Stanley and GF Securities Co. are joint sponsors for Innolight's listing.

However, the rally that has powered massive gains in AI-related shares is starting to show cracks. Traders are increasingly questioning whether valuations have run too far, with Innolight's stock dropping 29% from a June peak despite its 454% annual gain. The Hang Seng Tech Index has also faced headwinds from U.S. interest rate uncertainty and geopolitical tensions over semiconductor export controls.

"The bull case is that earnings growth continues and the leverage wins out," said Damien Boey, portfolio strategist at Wilson Asset Management in Sydney. "I don't think the market action is telling you that the story is that simple."

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