Chinese chip design company Montage Technology is seeking to raise up to approximately $902 million (about HK$7 billion) through a Hong Kong listing, a move that will not only rank among the largest recent IPOs in the Hong Kong market but also highlights the trend of Chinese tech companies leveraging capital markets to accelerate expansion, driven by the artificial intelligence boom. On Friday, January 30, Montage Technology disclosed documents on the Hong Kong Stock Exchange, outlining a plan to issue approximately 65.9 million shares, with a maximum offer price of HK$106.89 per share. This price represents a discount of at least 41% compared to its latest closing price of 162.18 yuan on the Shanghai A-share market. The company anticipates its shares will commence trading on the Hong Kong Exchange on February 9. The offering has garnered substantial support from cornerstone investors, including Alibaba and JPMorgan, who have committed to subscribing $450 million. The list of cornerstone investors also features UBS, the Scottish asset manager Aberdeen Group Plc, and Korea's Mirae Asset Securities. According to informed sources, sovereign wealth funds and long-term funds have shown strong interest, with subscription demand reaching several times the offering size, indicating robust confidence from global institutional investors in this chipmaker, which benefits from growing demand in data centers and AI accelerators.
Founded in 2004, Montage Technology specializes in designing chips that accelerate data flow for data centers and AI accelerators. The company stated that the proceeds from the fundraising will be primarily used for recruitment, investments, and acquisitions. China International Capital Corporation (CICC), Morgan Stanley, and UBS are acting as the joint sponsors for the listing. AI Demand Fuels Strong Performance Growth Montage Technology's listing coincides with a period of explosive performance. A recent company announcement forecasts its net profit for 2025 to reach between 2.15 billion yuan and 2.35 billion yuan, representing a year-on-year increase of 52.29% to 66.46%. Net profit after deducting non-recurring gains and losses is projected to be between 1.92 billion yuan and 2.12 billion yuan, with the highest increase approaching 70%. The company attributes the significant performance growth to robust industry demand driven by AI industry trends, particularly a notable increase in the shipment volume of interconnect chips. As global AI infrastructure construction accelerates, the demand for high-performance interconnect chips in data centers continues to climb, serving as the primary driver for the company's operational performance growth in 2025. According to analyst forecasts compiled by Bloomberg, this growth momentum is expected to continue, with the company's net profit potentially rising further to 3.3 billion yuan in 2026. Over the past year, Montage Technology's Shanghai-listed shares have more than doubled, and the company's current valuation is approximately $29 billion.
Hong Kong IPO Market Enjoys a "Strong Start" Montage Technology's listing has further intensified the heat in the Hong Kong IPO market. Data compiled by Bloomberg indicates that driven by fundraising demand from AI-related Chinese companies against the backdrop of Sino-US tech competition, the Hong Kong market has recorded fundraising of $5 billion in January, setting a record high for any January on record. In addition to Montage Technology, another chipmaker,爱芯元智半导体 (Aixin Yuanzhi Semiconductor), also announced on Friday its intention to seek HK$2.96 billion through a Hong Kong IPO, with plans to list on February 10. The IPO for爱芯元智半导体 is arranged by CICC, Guotai Junan, and Bank of Communications, and has already begun accepting subscriptions from retail and institutional investors.