Zhongji Innolight, a Shenzhen-listed optical-transceiver manufacturer, is close to receiving Chinese regulatory clearance for a Hong Kong share sale expected to raise around $7 billion. This fundraising target had previously risen from about $5 billion due to strong investor interest. If the full amount is raised through primary shares and retained by Innolight, its book equity could more than double before fees. The deal’s size would make it one of Hong Kong’s largest listings in years, exceeding Victory Giant’s April sale by about $4.4 billion.
At the reported size, the offering represents about 3.7% of Innolight’s market value and 1.34 times its first-quarter shareholder equity. Even with a 47% discount to its Shenzhen close, modeled dilution would be approximately 6.4%, assuming the entire $7 billion comes from new shares. The company’s shares closed at 1,169.31 yuan, down 1.24%, after gaining more than 90% this year, with a market value of about 1.3 trillion yuan.
Management has indicated a focus on capacity expansion, with orders already covering all of 2026 and some extending into 2027. Supply, particularly for optical and electrical chips and printed circuit boards, remains a constraint, which Innolight is addressing through long-term contracts and advance payments. The first-quarter accounts show significant investment in capacity, with prepayments for materials jumping more than tenfold to 1.49 billion yuan and construction in progress rising 66% to 2.36 billion yuan.
