Liu Sheng, Chairman and CEO of Zhongji Innolight (centre right) bangs the gong at the start of trading during the launch of the company’s initial public offering at the Hong Kong Exchanges and Clearing Limited (HKEX) in Hong Kong on July 30, 2026.
Peter PARKS / AFP via Getty Images
Zhongji Innolight, the Chinese AI component maker founded by billionaire Wang Weixiu, fell as much as 9.8% during its Hong Kong market debut on Thursday as global investors unwound their AI bets amid rising concerns that the market is getting overheated.
The company later pared some of the losses to end the day about 4% lower. Already listed in Shenzhen, it raised HK$53.4 billion ($6.8 billion) earlier this month by selling 54.5 million shares at HK$980 apiece in Hong Kong.
The share sale is the largest in the Asian financial hub in years, and the listing is the second largest in Asia in 2026, after Chinese chipmaker CXMT’s $8.6 billion initial public offering, also in July. Zhongji Innolight will use the proceeds for research and development as well as global production expansion, according to the prospectus. Meanwhile, its Shenzhen-listed shares plummeted over 9% on Thursday.
The company faces growing headwinds as investors have grown skeptical of AI-related stocks. It makes optical transceivers, a component crucial to the global data center buildout. Instead of copper wiring, the product uses optical signals to transmit and receive data, delivering the ultra-fast speeds required to train and deploy AI models.
“AI hardware stocks are experiencing a correction since Zhongji Innolight started its listing process in Hong Kong,” says Kenny Ng, Hong Kong-based securities strategist at Everbright Securities International. “Investors are worried about how long the rapid growth of AI companies can last.”
The sentiment, pronounced in U.S. markets, spilled over into Asia, the analyst says. Capital has pulled back from AI-related sectors after reports in July that Meta was considering leasing extra computing power from its data centers, triggering concerns that billionaire Mark Zuckerberg’s social media giant has invested too much in the supply side.
Fears of weak demand continue to intensify. South Korean memory chip giant SK Hynix fell after reporting earnings Wednesday evening that missed sky-high expectations, deepening a rout in the shares of chipmakers. Meta had to defend its AI spending plan on the same day as investors increasingly question how much return it would actually deliver after the company gave disappointing revenue forecasts for the third quarter.
Zhongji Innolight, for its part, has benefited tremendously from the AI boom. Late last year, its chairman and CEO Liu Sheng joined the world’s billionaire ranks amid the firm’s staggering rally in Shenzhen. In the first quarter of 2026, revenue surged over 190% year-on-year to 19.5 billion yuan ($2.9 billion), while net profit jumped almost 300% to 6.3 billion yuan, according to its prospectus. Zhongji Innolight derives nearly two-thirds of its revenue from the U.S., supplying key customers including Google.