Corrected: China AI supply-chain IPOs hold firm despite valuation pullback, Citi says

Citigroup

17/10/2026 08:24

Corrects spelling of Simon Yuan's surname throughout
By Selena Li
Bangkok, Oct 17 (Reuters) - Listings of Chinese AI supply chain companies are expected to stand their ground weathering rising valuation concerns and increasingly sharper scrutiny, a Citi C.N banker working with Chinese companies said. 
Despite recent valuation pullbacks on data centre companies, largely originating from the US market, future AI supply-chain listings would continue in Hong Kong, said Simon Yuan, Citi's head of China investment banking.
Chinese companies plan to list in Hong Kong are cushioned by a roughly even split between domestic Chinese and international demand, Yuan, who also heads Citi’s financial institutions group in APAC, said ​on the sidelines of the IMF meetings in Bangkok. 
The market is supported by a pool of local liquidity, with rising southbound capital from the Chinese mainland emerging as a key buying force, Yuan said. 
Still, "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 warned. 
Many Chinese hardware players have proactively established manufacturing footprints outside mainland China, he said, which helps them better service global clients and mitigate geopolitical friction. 
Chinese hardware suppliers have benefited from the global AI infrastructure boom, gaining both sales volume growth and higher unit prices, Yuan said.
Next year, the focus in Hong Kong's equity capital markets is expected to shift away from pure hardware, toward Chinese artificial intelligence models and application developers, he said.
"But these companies need to have a proven business model. They need to show very strong growth and profitability," he said.
Propelled by Chinese tech funding demand, 118 firms went public in Hong Kong in the first nine months of the year, raising HK$388 billion ($49.4 billion), up 106% year-on-year. 
($1 = 7.8479 Hong Kong dollars)

 (Reporting by Selena Li in Bangkok; Editing by Tom Hogue)
 ((Selena.Li@thomsonreuters.com; +852 39525868;))