Citi says Chinese AI supply-chain IPOs will hold up in Hong Kong despite valuation pullback

what happened

Listings of Chinese AI supply-chain companies will continue in Hong Kong despite growing valuation concerns and tighter investor scrutiny, a Citi banker working with Chinese companies said. Simon Yuen, Citi's head of China investment banking, noted that the recent valuation pullback in data centre companies has mostly originated in the US market.

According to Yuen, demand for Hong Kong listings is split roughly evenly between domestic Chinese and international investors, while rising southbound capital from the mainland is becoming a key buying force. He warned that if the wider AI cycle turns in the US, the impact would be felt everywhere, Hong Kong included. He expects the focus to shift next year from pure hardware toward Chinese AI models and application developers.

In the first nine months of the year, 118 firms went public in Hong Kong, raising HK$388 billion ($49.4 billion), up 106% year-on-year.

why it matters

For markets, the signal is that capital inflows into Hong Kong offerings are holding up, but the sector remains sensitive to sentiment in the US AI segment. Hong Kong-listed companies and the Hang Seng index depend on this flow, while hardware makers have benefited from the global AI infrastructure boom.

market impact

Hong Kong IPO market: mainland capital supports demand, but a weaker US AI segment is the key risk

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