Wolon Nuclear Materials initiated its global offering on February 5 and is expected to commence trading on the Hong Kong Stock Exchange on February 13. The maximum issue price has been set at HK$20.09 per share, with a base offering size of 140 million shares, corresponding to a total issuance scale of approximately HK$2.81 billion. As a leading global supplier of AI high-speed copper cables, the company's technological advantages include its 224G products securing a position in NVIDIA's top-tier supply chain and its 448G samples entering the customer validation phase. Combined with the liquidity support from its inclusion in the Hong Kong Stock Connect on the first day of trading, these factors represent the core highlights of this listing. However, the offering faces multiple challenges: the discount to its A-share price is limited, there is no greenshoe option to provide market stabilization funds, cornerstone investor participation is relatively low without support from major long-term foreign institutions, and the company must contend with AI industry technological shifts, high raw material costs, and the general valuation discount applied to manufacturing stocks in the Hong Kong market.
The maximum Hong Kong IPO price of HK$20.09 per share represents a discount of approximately 37.1% compared to the A-share closing price of 28.41 yuan on February 10. Compared to the ten A-to-H listings since 2026, this discount level offers limited attractiveness. Only four projects—Dongpeng Beverages, Haowei Group, Muyuan Foods, and Lead Intelligent Equipment—had smaller discounts than Wolon Nuclear Materials. The other six projects all had discounts exceeding 40%, including companies with market capitalizations in the hundreds of billions.
Furthermore, it is notable that this issuance does not include an over-allotment option, meaning there are no designated market stabilization funds. This may indicate that during the preliminary market assessment, the company and its underwriters did not receive sufficiently positive order feedback, and a consensus on the acceptability of its issue price and business prospects had not been formed. Consequently, they opted to forgo stabilization arrangements at the launch, indirectly signaling weak order book support.
Looking at recent market cases, A-to-H listings such as Seres, Haitian Flavoring, and Zhongwei New Materials, which debuted in Hong Kong since 2025, all experienced intraday breaks of their issue prices on their first trading day. Seres saw its shares fall more than 10% below the offer price at one point, facing significant valuation pressure. However, because these companies had greenshoe mechanisms in place, their underwriters were able to utilize stabilization funds for substantial purchases near the market close, ultimately preventing a closing price below the issue level. This effectively alleviated short-term stock price volatility and preserved room for subsequent valuation recovery.
According to Hong Kong Stock Connect rules, Wolon Nuclear Materials, as an A-to-H listed company without a greenshoe, is eligible for inclusion in the Connect on its first trading day. This mechanism provides potential liquidity support for its stock price. Referencing A-to-H listings like Guoen Technology and Jihong Limited, which were included on their debut dates since 2025, their shares rose 11.6% and 39.1% respectively on the first day.
Regarding cornerstone investment, Wolon's IPO attracted 16 cornerstone investors who collectively subscribed to $124 million, accounting for 34.5% of the total issuance size. Among A-to-H projects since 2026, only two issuances with scales below HK$2 billion—Longqi Technology and Guoen Technology—had cornerstone participation ratios below 30%. All other projects saw cornerstone ratios reach 40%, with some recent ones approaching 50%, placing Wolon's cornerstone subscription level on the relatively low side.
Specifically, among the cornerstone investors, prominent Chinese private equity firms Hillhouse Capital and Jinglin Capital invested $25 million and $18 million respectively. Government-affiliated entities—Huizhou Huilian (backed by the Huizhou municipal government) and Guohui Hong Kong (backed by the Shandong provincial government)—invested $25.7 million and $5 million, demonstrating regional industrial policy support. Upstream raw material suppliers Jiangxi Copper and Shenzhen Capchem participated with investments of $3 million and $7.1 million, laying groundwork for future industrial cooperation. Other corporate investors include Shenzhen New World, Gaoshi Development, and Puxin (ultimately linked to Luzhou Laojiao), though their strategic synergy with Wolon's core business is limited. Foreign institutions participating include hedge funds and private equity firms like Jump Trading and Factorial, but their influence in the Hong Kong IPO market is modest, and the cornerstone cohort lacks influential long-term foreign institutional investors.
Financially, Wolon has achieved steady growth in revenue and profit in recent years. From 2022 to 2024, and for the first three quarters of 2025, the company reported revenues of 5.3 billion yuan, 5.7 billion yuan, 6.9 billion yuan, and 6.1 billion yuan, respectively. Net profit attributable to shareholders was 610 million yuan, 700 million yuan, 850 million yuan, and 820 million yuan for the same periods. According to the company's earnings forecast, full-year 2025 net profit is expected to be between 1.1 billion yuan and 1.18 billion yuan, representing year-on-year growth of 29.79% to 39.22%. However, this forecast is below the sell-side analyst consensus estimate of 1.26 billion yuan.
A key investment highlight is Wolon's position in the global AI high-speed communication copper cable supply chain. Its 224G high-speed communication copper cables are directly used in AI data centers and have become a major driver of performance growth. A Frost & Sullivan report indicates that in 2024, the top five manufacturers covering high-speed copper cables generated global revenue of approximately 7.6 billion yuan, accounting for 57.2% of the combined market share. Among them, Wolon ranked third with revenue of 1.7 billion yuan and a 12.7% market share, making it the largest Chinese high-speed copper cable communication manufacturer in the global market for that year.
In terms of customer partnerships, Wolon's collaboration with global connector leader Amphenol continues to deepen, serving as a critical link for its entry into NVIDIA's AI supply chain. Revenue from Amphenol grew from 138 million yuan in 2022, to 99 million yuan in 2023, 280 million yuan in 2024, and 590 million yuan for the first three quarters of 2025, representing 2.6%, 1.7%, 4.0%, and 9.7% of total revenue for the respective periods. Both the absolute amount and proportion of revenue have shown a significant upward trend since 2024, coinciding with a notable rise in the company's stock price beginning early that year.
Concurrently, the company is actively developing next-generation technology. It has completed sample development for single-channel 448G high-speed communication cables, which are currently undergoing validation by key customers. NVIDIA's announcement of the Rubin platform at CES 2026, which may upgrade to 448G copper cables, provides medium-term demand support for the copper interconnect market.
However, Wolon faces multiple operational challenges. One significant pressure comes from raw material costs. From 2022 to the first three quarters of 2025, raw material costs accounted for 74.6%, 72.9%, 72.6%, and 72.1% of total sales costs, respectively, meaning price fluctuations significantly impact profitability. The price of copper rose from 59.2 thousand yuan per metric ton in 2022 to 89.2 thousand yuan per metric ton in the first three quarters of 2025, substantially increasing cost pressure. Although a decline in EVA price from 22.2 thousand yuan to 9.9 thousand yuan per metric ton provided some offset, the company still needs to mitigate cost increases through strategic procurement and long-term supplier agreements.
Another challenge is the risk posed by product demand changes due to AI industry technological shifts. During its CES 2026 keynote, NVIDIA unveiled that its next-generation AI server platform, Vera Rubin, will adopt a cable-less design, using a new mid-board design to replace traditional connecting cables, reducing server assembly time from about two hours to five minutes. This technological shift could significantly reduce market demand for traditional cables like copper cables. Following this news, market concerns about Wolon's future demand within the AI supply chain emerged, leading to a plunge in its share price, which hit the daily downside limit on January 28, reflecting panic selling sentiment.
Furthermore, competition in the AI high-speed copper cable sector is intensifying. Jingda Optoelectronics' subsidiary Hengfeng Special Cable already supplies high-end copper wires to NVIDIA via Amphenol, and there are market rumors that Shenyu Shares is an indirect supplier of copper wires to NVIDIA. The number of domestic players in this sector is increasing, leading to an evolving competitive landscape.
From a valuation perspective, Wolon's total market capitalization (including the Hong Kong issuance) is approximately HK$42.6 billion. This corresponds to forward price-to-earnings ratios of 33.6x for 2025 and 18.9x for 2026. While this valuation appears advantageous compared to A-share peers like Jingda Optoelectronics, Zhaolong Interconnect, and Shenyu Shares, the Hong Kong market generally applies a valuation discount to manufacturing companies, resulting in relatively lower market attention and capital allocation willingness for such stocks.