Victory Semiconductor, Nvidia Supplier, Prepares for Debut After Hong Kong's Largest Listing This Year

Victory Giant Technology Huizhou Co. Surges 50% in Hong Kong Trading Debut

Victory Giant Technology Huizhou Co., a leading Chinese supplier of Nvidia Corp., made a strong impression on its Hong Kong trading debut, surging 50% in value after raising $2.6 billion in the city's largest listing in seven months. The company's shares rose to close at HK$315.00 on Tuesday, compared with a listing price of HK$209.88 each.

The listing priced at the maximum and attracted thirty-seven cornerstone investors, who purchased about $997 million worth of stock. These investors, which include Chinese billionaire Jack Ma-backed Yunfeng Capital and Morgan Stanley & Co. International Plc, were guaranteed allocation in exchange for holding the shares for at least six months. The stock jumped 74% in gray-market trading before the debut.

The share sale, Hong Kong's biggest since Zijin Gold International Co.'s $3.7 billion offering in September, has kicked off what bankers in the city hope to become a procession of heavyweight deals. Victory Giant joins a wave of Chinese listings in the artificial intelligence space, a popular trade against the backdrop of volatile Middle East situation. The company makes printed circuit boards, which form the intricate electronic backbone of AI servers.

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The listing also attracted Chinese and global investors, including China Investment Corp. and Norges Bank Investment Management, the world's largest sovereign fund, as well as BlackRock Inc. and Fidelity Investments. Founded in 2006 by Chen Tao, the Huizhou-based company is seen as a leader in high-density interconnect and multi-layer PCBs that are crucial for AI chips.

Strong Fundamentals Drive Valuation

According to Kenny Ng, a strategist at China Everbright Securities International Co., the fundamentals of the company are driving its valuation. "It's not just about investors buying into China's hard tech, it all comes down to fundamentals," he said. "Thanks to the AI boom, demand and growth for PCBs are incredibly strong right now, which directly boosts the valuation. Ultimately, it's the huge upside of the AI hardware sector that's really driving the price."

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Victory Giant plans to add $30 billion in capacity over the next three years, including an additional $10 billion worth of products to be manufactured in Thailand, Vietnam and Malaysia. The company can use the proceeds from the IPO to grow its market share in the ASICs market, though it needs to compete with existing suppliers from Taiwan and Japan.

The listing has extended a string of strong first-day performances by Chinese technology shares in Hong Kong. Last week, Sigenergy Technology Co., which makes energy storage equipment, jumped 103% in its debut, while robotics software unicorn Manycore Tech Inc. surged 187%. The shares of Delton Technology Guangzhou Inc., another Chinese maker of circuit boards, have gained about 110% since their Hong Kong debut a month ago.

Citigroup analysts led by Karen Huang maintain a buy recommendation for Victory Giant, valuing the Shenzhen-listed shares at 20 times 2027 earnings, with a price target of 415 yuan. The listing price had a discount of about 47% to Victory Giant's closing price on Monday in Shenzhen, where they closed at 343 yuan. Tuesday's debut quickly narrowed that to about 17%. The fervor for AI has driven the Shenzhen stock up nearly fourfold over the past year.

JPMorgan Chase, China Securities International and GF Securities are joint sponsors of the offering.