China AI firms eye Hong Kong listings

Hardware companies expect global investment; face scrutiny

BANGKOK:

Listings of Chinese AI supply chain companies are expected to stand their ground, weathering rising valuation concerns and increasingly sharper scrutiny, a Citi banker working with Chinese companies said.

Despite recent valuation pullbacks on data centre companies, largely originating from the US market, future AI supply-chain listings would continue in Hong Kong, said Simon Yuan, Citi's head of China investment banking.

Chinese companies plan to list in Hong Kong are cushioned by a roughly even split between domestic Chinese and international demand, Yuan, who also heads Citi's financial institutions group in APAC, said on the sidelines of the IMF meetings in Bangkok. The market is supported by a pool of local liquidity, with rising southbound capital from the Chinese mainland emerging as a key buying force, Yuan said.

Still, "if the whole AI cycle turns in the US – and we have seen some volatility in the last few weeks – you will see an impact everywhere, Hong Kong included," he warned.

Many Chinese hardware players have proactively established manufacturing footprints outside mainland China, he said, which helps them better service global clients and mitigate geopolitical friction. Chinese hardware suppliers have benefited from the global AI infrastructure boom, gaining both sales volume growth and higher unit prices, Yuan said.

Next year, the focus in Hong Kong's equity capital markets is expected to shift away from pure hardware, toward Chinese artificial intelligence models and application developers, he said.