July 27 (Reuters) - Chinese optical parts maker Zhongji Innolight is guiding potential investors in its Hong Kong listing to a price of HK$980 ($124.97) a share, below the upper marketing limit of HK$1,010, two people with direct knowledge of the matter said.
Orders below HK$980 risk missing out on the deal, one of the people said, adding the final price could still be higher. The formal offer price is due to be set by noon on Tuesday, the second person said.
The Shenzhen-listed company was set to price the deal at HK$980 per share, Bloomberg News reported earlier on Monday, citing people familiar with the matter.
Zhongji Innolight did not respond to Reuters' request for comment.
Zhongji Innolight is selling 54.5 million Hong Kong shares. At HK$980 each, the company would raise about HK$53.4 billion ($6.8 billion) before any over-allotment option. At the maximum price, it would raise about HK$55 billion.
The listing is set to be the city's biggest share sale in nearly seven years, since Alibaba raised $12.9 billion in its secondary listing in 2019, LSEG data showed.
The deal ranks as Asia's second-largest listing this year after Chinese chipmaker CXMT's $8.6 billion Shanghai IPO. CXMT's shares surged 466% at their debut.
Zhongji Innolight makes optical transceivers – small devices that help move large amounts of data through fibre optic cables. The transceivers are used in data centres, cloud networks and artificial intelligence computing systems.
The listing comes as China races to build homegrown AI champions while U.S.-led export curbs limit its access to advanced chips.
Zhongji plans to use the proceeds for research and development, global production expansion, supply-chain upgrades, acquisitions and working capital.
Its first-quarter net profit nearly quadrupled to 6.32 billion yuan ($933.9 million), while revenue nearly tripled to 19.5 billion yuan, its filings showed. The company generated 61.7% of its first-quarter revenue from the U.S.
Its shares are due to start trading in Hong Kong on July 30.
($1 = 7.8419 Hong Kong dollars)
($1 = 6.7674 Chinese yuan renminbi)
Reporting by Selena Li in Hong Kong, Gnaneshwar Rajan in Bengaluru and Yantoultra Ngui in Singapore; Editing by Mrigank Dhaniwala and Christopher Cushing
Source: Reuters