(Oct 26): Suzhou Dongshan Precision Manufacturing Co, a printed circuit board maker, raised about HK$9.9 billion (RM5.15 billion) in Hong Kong’s biggest listing in nearly two months, which hit a volatile market for companies related to the artificial intelligence build out.

The company priced about 113.8 million shares at HK$86.80 apiece, compared to a maximum of HK$93.80, according to a filing to the city’s stock exchange on Sunday, which confirmed an earlier Bloomberg News report. Dongshan said it had not exercised an upsize option. Trading is expected to begin on Oct 28. The price represents a discount of about 35% to the Friday close of its Shenzhen-listed stock, which is up 35% this year even after a nearly 60% slide from a June peak.

Dongshan, which makes the components that are the intricate electronic backbone of AI servers, is braving the market at a tricky time across Asia, especially for companies in its business. 

First-time listings have raised more than US$50 billion (RM204.2 billion) in Hong Kong this year, edging closer to the US$57.8 billion record set in 2010 but rising bond yields and poor deal performance are making investors and issuers more cautious. A string of withdrawals and delays, including by major data centre operators in the region, has prompted some companies to put near-term listing plans on hold.

“With Dongshan’s Shenzhen share price declining substantially, the reference valuation for its Hong Kong offering has also fallen,” said Francis Tan, Asia chief strategist at Indosuez Wealth Management in Singapore. “Investors still want exposure to the AI revolution but they are increasingly demanding earnings visibility rather than simply buying the narrative.”

The company’s Shenzhen-listed shares dropped as much as 5.6% in early Monday trading.

Chinese technology stocks have been particularly hit hard, with no end in sight for a deepening selloff as investors confront the realities of an economy that’s weak enough to erode corporate profits but not to trigger forceful new stimulus.

The world’s second-largest equities market has lost US$3.5 trillion in value from a peak in May, data compiled by Bloomberg show. The rout intensified last week, pushing the onshore benchmark CSI 300 Index into a bear market and a technology sector gauge in Hong Kong toward erasing all its gains since Beijing’s sweeping growth support package two years ago.

Dongshan Precision’s listing leaned heavily on cornerstone investors, which get guaranteed allocation in the deal in exchange for holding the stock for at least six months. They include JPMorgan Asset Management, Alibaba Group Holding Ltd, CPE and Montage Technology Co, who agreed to buy a combined 50% of the offering. Jane Street Group and Jump Trading LLC are also among them.

The Suzhou-based company makes PCBs and optical transceivers, key components for AI. It’s the third-largest PCB supplier in an US$85.2 billion global market, according to its prospectus.

UBS Group AG, Guotai Haitong Securities Co, GF Securities Co and Citic Securities Co are joint sponsors for the Hong Kong listing.

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