By Kane Wu and Yantoultra Ngui
HONG KONG/SINGAPORE, July 17 (Reuters) – China’s Zhongji Innolight moved closer to a Hong Kong share sale after publishing its post-hearing draft prospectus on Friday, giving investors fresh details on its rapid growth and U.S.-related risks.
The Shenzhen-listed company makes optical modules used in artificial intelligence data centres. These parts help move large amounts of data quickly between computer servers.
Zhongji aims to raise up to $7 billion in its Hong Kong listing, sources told Reuters in June. At that size, the deal would surpass Luxshare Precision’s $3.1 billion share sale on July 6 to become Hong Kong’s largest listing this year, according to LSEG data.
The company could launch its bookbuilding next week and make its Hong Kong market debut in the first week of August, said a source with direct knowledge of the matter, who added that the timeline could change based on market conditions. The source declined to be named because the information was not public.
Zhongji did not immediately respond to a request for comment on Friday.
Zhongji’s filing comes as AI-related shares have faced a sharp pullback of late. A chip selloff hit global markets on Friday, while Chinese stocks fell as memory chipmaker CXMT’s planned $8.6 billion IPO raised concern that large new listings could drain funds from the markets.
Companies have raised $33.8 billion from new listings in Hong Kong so far in 2026, a record year-to-date total based on LSEG data. That is more than double the $16.4 billion raised in the year-earlier period in 2025.
Zhongji said it has been the world’s largest optical interconnect solutions provider by revenue for five straight years since 2021, citing industry consultant CIC in its draft prospectus.
Its revenue rose 192% to 19.5 billion yuan ($2.9 billion) in the three months ended March 31, while profit jumped 274% to 6.32 billion yuan, its draft prospectus showed.
Its 2025 profit rose 116% to 11.58 billion yuan on revenue of 38.24 billion yuan, according to the draft prospectus.
In its filing, Zhongji said it planned to use the listing proceeds for research and development, global production expansion, supply chain work, strategic acquisitions and general working capital. The deal size, pricing and timetable were not disclosed.
U.S. RISK
The U.S. accounted for 61.7% of Zhongji’s revenue in the first quarter, up from 57.3% for all of 2025, the draft prospectus showed.
Zhongji said the U.S. Department of Defense added the company to its Chinese military companies list on June 8.
The company said the list was not an economic sanctions list and did not by itself restrict its business with U.S. customers or trading in its securities.
It said it had not seen any material customer order cancellations, suspensions, reductions or delays since it was added to the list. Zhongji said its products were made for commercial technology and not for military use.
Zhongji said in a separate filing that it had appointed Goldman Sachs, CICC, Morgan Stanley, GF Securities, Haitong International, Citi, HSBC and China Galaxy International as overall coordinators for its listing.
($1 = 6.7769 Chinese yuan renminbi)
(Reporting by Kane Wu in Hong Kong, Yantoultra Ngui in Singapore and the Beijing newsroom; Writing by Farah Master; Editing by Christopher Cushing, Neil Fullick and Thomas Derpinghaus)
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