- Closing price values Ligent at about HK$33.9 billion
- Shares jumped as much as 19.2% in morning trading
- Proceeds will fund product development and capacity expansion
HONG KONG, Sept 22 (Reuters) - Shares of Chinese fibre-optic communications equipment maker Ligent Technologies ended 4.6% higher in their Hong Kong debut on Tuesday, after the company tapped demand for AI-related equipment to raise HK$5.67 billion ($723 million).
The stock rose as much as 19.2% to HK$39.3 a share in morning trade and closed at HK$34.48, versus its HK$32.96 offer price.
It was the 12th most actively traded stock by turnover on the Hong Kong bourse on Tuesday, with 68.35 million shares worth HK$2.46 billion changing hands.
Hong Kong's Hang Seng Index was up 0.2%, while the Hang Seng Tech Index climbed 0.3%.
Ligent makes optical transceivers, chips and network terminals. Its transceivers are devices that convert data into light signals so they can travel quickly through fibre-optic cables.
The company's listing comes as investors seek exposure to suppliers of equipment used in artificial intelligence data centres, which need faster links between servers and switches.
"The company's vertical integration in the optical module manufacturing is a decent selling point despite the fact that its current shipment is still skewed towards the lower end of the optical module product spectrum," said Ke Yan, head of research at Singapore-based investment research firm Shenton Research.
"The key risk is that the valuation for players in the AI supply chain have built in exponential compute-demand driven growth. Therefore, deceleration of such growth in the demand will become catalyst for de-rating of such players," he added.
Ligent sold 172.01 million shares in its base offering, giving it a market value of about HK$32.4 billion at the offer price, according to its listing prospectus.
Cornerstone investors include Primavera Investment Fund, GigaDevice, Amlogic Hong Kong, Mirae Asset Securities HK, PAG, ORIX-backed Turquoise Hime, Barings, GF Fund and E Fund, the prospectus showed.
The public offering was subscribed 35.16 times, while the international offering was subscribed 4.67 times, according to a filing on Monday.
The company said it plans to spend about 52.9% of the net proceeds on research and development, mainly for faster optical products and chips. It will use about 25.1% to expand production capacity.
Ligent posted a 29.7% increase in net profit to 661 million yuan ($98.7 million) for the six months ended June 30 versus the same period a year earlier, and a 27.9% increase in revenue at 5.39 billion yuan.
Hisense Group Holding will retain control of about 40.1% of Ligent after the offering, assuming no overallotment option is exercised.
($1 = 7.8456 Hong Kong dollars)
($1 = 6.6968 Chinese yuan renminbi)
Reporting by Yantoultra Ngui and Donny Kwok; Editing by Christian Schmollinger, Thomas Derpinghaus, Lincoln Feast and Kim Coghill
Source: Reuters