{"text":[[{"start":8.52,"text":"A winner of the US-China rivalry that supplies AI data centre equipment to both countries fell as much as 10 per cent in its Hong Kong debut on Thursday as it was swept up in a global tech sell-off."}],[{"start":20.64,"text":"Zhongji Innolight, which is already listed in Shenzhen, fell to as low as HK$880 after pricing its Hong Kong shares at HK$980. It raised HK$53.4bn ($6.8bn), with an option to sell additional shares that could bring the figure to $7.8bn."}],[{"start":40.64,"text":"Innolight is one of China’s most valuable companies, with a market capitalisation of more than $145bn. The Hong Kong listing is the second largest in Asia this year and joins a series of market debuts for the “picks and shovels” suppliers of the AI boom."}],[{"start":56.68,"text":"The Shandong-based company makes optical transceivers and interconnects, which are needed for the fast transfer of information between chips in AI data centres. Major customers include Alphabet, Amazon, Alibaba and Huawei."}],[{"start":70.08,"text":"“Some of these leading hardware companies in China are actually being recognised as tier-one suppliers to global companies,” said Jason Lui, head of Asia-Pacific equity and derivative strategy at BNP Paribas."}],[{"start":82.16,"text":"“These are not high-profile products. They are very important, but they were not recognised.”"}],[{"start":88.6,"text":"Innolight has experienced rapid earnings growth — and an even faster rise in its share price — as a result of its position selling optical transceivers to data centres in both China and the west."}],[{"start":99.84,"text":"Its Shenzhen shares have risen more than 4,000 per cent since the start of 2023. Net profit jumped from Rmb2.2bn ($325mn) that year to Rmb10.8bn last year."}],[{"start":114.28,"text":"The listing comes at a shaky time for shares of companies supplying hardware for the global AI infrastructure build-out."}],[{"start":120.76,"text":"Innolight’s Shenzhen shares have fallen more than 40 per cent from their peak in June alongside drops in tech indices around the world. Its Shenzhen shares fell more than 15 per cent on Thursday."}],[{"start":127.4,"text":"“The whole global narrative between AI software and AI hardware is oscillating a lot,” said Lui. “For the past three weeks, it’s been about getting money out of hardware and moving it into the underperformers.”"}],[{"start":140.08,"text":"Like AI chip darlings Samsung Electronics and SK Hynix, Innolight’s biggest customers are US tech groups such as Alphabet and Amazon, which account for 22.4 per cent and 11.8 per cent of revenue, respectively. Its equipment is used in Nvidia graphics processing unit clusters in data centres."}],[{"start":159.84,"text":"Lui said demand from the so-called hyperscalers for AI hardware was still “quite robust, at least in the near term”."}],[{"start":166.4,"text":"Innolight is also benefiting from mainland China’s build-out of AI infrastructure, with Alibaba and Huawei accounting for 5 per cent and 1.9 per cent of revenue, respectively."}],[{"start":177.48,"text":"The company said it would spend its raised funds primarily on research and development, expanding production and “supply chain resilience”, as well as “strategic acquisitions and investments”."}],[{"start":188,"text":"Goldman Sachs, CICC, Morgan Stanley and GF Securities were joint sponsors of the listing. Cornerstone investors include Temasek, Hillhouse’s HHLRA, JPMorgan Asset Management and BlackRock."}],[{"start":207.24,"text":""}]],"url":"https://audio.ftcn.net.cn/album/a_1785389362_3535.mp3"}