Ligent Technologies Seeks $723 Million in Hong Kong IPO to Fund AI-Led Expansion

Ligent Technologies, a Chinese maker of fibre optic communications equipment, is seeking to raise approximately HK$5.67 billion ($723 million) through an initial public offering in Hong Kong, according to a prospectus filed with the stock exchange on Monday.

The company has secured $340 million from cornerstone investors, representing about 47% of the base share sale. Cornerstone investors are institutions that commit to purchasing shares before trading begins. The group includes Primavera Investment Fund, GigaDevice, Amlogic Hong Kong, Mirae Asset Securities HK, PAG, ORIX-backed Turquoise Hime, Barings, GF Fund and E Fund.

Ligent is offering 172 million shares at HK$32.96 apiece, implying a market value of HK$32.4 billion ($4.13 billion). The offer includes an option for underwriters to sell up to 25.8 million additional shares. The company, controlled by Chinese technology conglomerate Hisense Group Holdings, plans to list its shares in Hong Kong on September 22.

Proceeds from the IPO will be used to fund research and development, expand production capacity and support general corporate purposes.

Ligent manufactures optical transceivers, optical chips and network terminals used in data centres, cloud computing and telecommunications networks. Sales of data-centre transceivers, its largest business, rose 36.6% to 3.74 billion yuan, driven by demand for equipment used in artificial intelligence and cloud computing.

In the prospectus, the company reported a 29.7% increase in net profit to 661 million yuan ($98.5 million) for the six months ended June 30, compared with the same period a year earlier. Revenue rose 27.9% to 5.39 billion yuan.

Hisense is set to retain 40.1% of Ligent after the IPO if the overallotment option is not exercised, down from 48.6% before the offering. Citigroup and CITIC Securities are joint sponsors of the deal.