Zhongji Innolight Nears Hong Kong Listing of Up to $7 Billion

By: Kane Wu and Yantoultra Ngui Source: Reuters

HONG KONG/SINGAPORE, July 17 (Reuters) – China's Zhongji Innolight moved closer to a Hong Kong share sale after publishing its post-hearing draft prospectus on Friday, offering investors fresh details on its rapid growth and U.S.-related risks.

The Shenzhen-listed company manufactures optical modules used in artificial intelligence data centres. These components facilitate high-speed data transfer between computer servers.

Listing Details

Zhongji aims to raise up to $7 billion in its Hong Kong listing, sources told Reuters in June. At that size, the deal would surpass Luxshare Precision's $3.1 billion share sale on July 6, becoming Hong Kong's largest listing this year, according to LSEG data.

The company could launch bookbuilding next week and make its Hong Kong market debut in the first week of August, said a source with direct knowledge of the matter. The source added that the timeline could change based on market conditions and declined to be named as the information was not public.

Zhongji did not immediately respond to a request for comment on Friday.

Regulatory Approval

The China Securities Regulatory Commission approved the firm's Hong Kong listing plan on July 8, a statement released by the regulator showed on Friday.

Market Context

Zhongji's filing comes as AI-related shares have faced a sharp pullback. A chip selloff hit global markets on Friday, while Chinese stocks fell amid concerns that memory chipmaker CXMT's planned $8.6 billion IPO could drain funds from the markets.

Companies have raised $33.8 billion from new listings in Hong Kong so far in 2026, a record year-to-date total based on LSEG data. That is more than double the $16.4 billion raised in the same period in 2025.

Financial Performance

Zhongji stated it has been the world's largest optical interconnect solutions provider by revenue for five consecutive years since 2021, citing industry consultant CIC in its draft prospectus.

Key financial highlights from the draft prospectus:

• Q1 2026: Revenue rose 192% to 19.5 billion yuan ($2.9 billion); profit jumped 274% to 6.32 billion yuan
• Full Year 2025: Profit rose 116% to 11.58 billion yuan on revenue of 38.24 billion yuan

Use of Proceeds

Zhongji plans to use the listing proceeds for:

• Research and development
• Global production expansion
• Supply chain improvements
• Strategic acquisitions
• General working capital

The deal size, pricing, and timetable were not disclosed.

U.S. Exposure and Risks

The U.S. accounted for 61.7% of Zhongji's revenue in the first quarter, up from 57.3% for all of 2025, according to the draft prospectus.

The U.S. Department of Defense added the company to its Chinese military companies list on June 8. Zhongji stated that the list is not an economic sanctions list and does not by itself restrict business with U.S. customers or trading in its securities.

The company reported no material customer order cancellations, suspensions, reductions, or delays since being added to the list. It also stated that its products are designed for commercial technology, not military use.

Underwriters

Zhongji appointed the following banks as overall coordinators for its listing:

• Goldman Sachs
• CICC
• Morgan Stanley
• GF Securities
• Haitong International
• Citi
• HSBC
• China Galaxy International

($1 = 6.7769 Chinese yuan renminbi)

Reporting by: Kane Wu in Hong Kong, Yantoultra Ngui in Singapore, and the Beijing newsroom Writing by: Farah Master Editing by: Christopher Cushing, Neil Fullick, and Thomas Derpinghaus