Two Chinese technology companies began marketing shares in Hong Kong to raise a combined US$1.5 billion, testing investor appetite amid volatile global markets and worries over the valuations of companies tied to artificial intelligence.
Shenzhen-listed Suzhou Dongshan Precision Manufacturing, a maker of printed circuit boards for AI devices, plans to raise up to 10.67 billion Hong Kong dollars, equivalent to US$1.4 billion, according to a filing on Tuesday.
The company, which plans to offer 113.8 million H shares at a maximum offer price of HK$93.80 each, has already secured commitments from cornerstone investors for about half of the offering ahead of the IPO.
Alibaba Group Holding's investment arm, JPMorgan Asset Management and Aurora SF, a Singapore-based fund, are among the cornerstone investors for Suzhou Dongshan.
Separately, Changzhou Microintelligence, an industrial-robot maker that uses AI, is offering 37.3 million shares to raise as much as HK$799.9 million. The company has set a price range of between HK$16.63 and HK$21.46 a share.
Shares of the two companies are expected to start trading on the Hong Kong Stock Exchange on Oct. 28.
The IPOs are hitting the market when global stock indexes are volatile amid worries about the valuations of AI-linked companies and the prolonged U.S.-Iran war that has stoked inflation concerns.
Deal activity in Hong Kong has been strong. The city is the world's second-largest IPO market behind Nasdaq, raising more than HK$388 billion across 116 listings in the first nine months, a record for the period, according to an October report by KPMG.
KPMG said dual listings by mainland Chinese companies contributed nearly 70% of the proceeds, and more than half of the total came from high-tech sectors such as AI and semiconductors.
It expects Hong Kong to surpass its 2010 annual record of HK$449.5 billion, with full-year proceeds potentially approaching HK$500 billion.
UBS and CITIC Securities are among the joint sponsors for Dongshan's offering, while BOC International, ICBC International and Futu Securities are among the banks working on Microintelligence's IPO.
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