Chinese artificial intelligence supply chain companies are expected to continue attracting investors and pursuing stock market listings in Hong Kong, despite growing concerns over company valuations and recent volatility in the global AI sector, according to Citi.
Simon Yuan, Citi’s head of China investment banking, said planned listings by Chinese AI-related businesses were likely to remain resilient even as valuations of data centre companies come under pressure, particularly in the United States.
Speaking on the sidelines of the International Monetary Fund meetings in Bangkok, Yuan said Hong Kong’s market benefited from demand from both mainland Chinese investors and international buyers.
He also highlighted the growing role of mainland Chinese investors investing in Hong Kong stocks, describing the flow of capital into the city as an important source of market support.
However, Yuan warned that Hong Kong would not be completely protected if enthusiasm for artificial intelligence investments weakened in the United States.
“If the whole AI cycle turns in the US — and we have seen some volatility in the last few weeks — you will see an impact everywhere, Hong Kong included,” he said.
Chinese AI Companies Look Beyond Hardware
Chinese hardware suppliers have benefited from the worldwide expansion of AI infrastructure, recording growth in sales volumes alongside higher prices for their products.
According to Yuan, many of these companies have also established manufacturing operations outside mainland China. The move allows them to serve international customers more effectively while reducing exposure to geopolitical tensions.
Looking ahead, Yuan expects Hong Kong’s equity capital market to gradually shift its attention from hardware manufacturers towards Chinese AI model developers and companies building AI-powered applications.
However, he stressed that these businesses would need to demonstrate sustainable growth, profitability and a proven commercial model to attract investors.
The outlook comes amid strong activity in Hong Kong’s stock market. A total of 118 companies went public in the city during the first nine months of the year, raising HK$388 billion, equivalent to approximately $49.4 billion.
The funds raised represented a 106 per cent increase compared with the same period a year earlier, highlighting the growing importance of Hong Kong as a fundraising destination for Chinese businesses.
Despite concerns about valuations and possible changes in global AI investment trends, Citi expects Chinese AI supply chain listings to remain relatively firm, supported by demand from domestic and international investors.
