Apple supplier lists on Hong Kong exchange, albeit on a bad day

Lingyi iTech Guangdong Co., a Chinese electronic supplier for Apple, made its debut on the Hong Kong exchange on Friday with much fanfare. But the positivity around the stock could not sustain the selloff in tech stocks.

On Friday, Lingyi iTech shares rose in the opening session in their Hong Kong debut after raising as much as HK$8.3 billion ($1.06 billion) through its initial public offering (IPO), the biggest in the city since April.

The stock rose as much as 15.9% to HK$11.80 in early trading compared with the listing price of HK$10.18 apiece. However, a global rout in technology stocks not just put a brake on the rally, but pulled down the share price even lower than its IPO price.

Volatile debut

During closing hours, Lingyi iTech shares were trading around 3% lower than their issue price at HK$9.88. This was over 16% down from their peak level of the day.

The story changed in a matter of a few hours after Apple on Thursday increased prices across its range of Macs and iPads, with many of its most popular models seeing hikes of as much as 20-42%.

Following the announcement, shares of Apple Inc. tumbled 6%, triggering sell-off in stocks of other technology giants across Asia. US companies like Microsoft Corp. and chipmaker Nvidia lost 3.5% and 2%, respectively. South Korean memory chip giants SK Hynix Inc. and Samsung Electronics Co. both slid more than 8%. Japan-based Kioxia Holdings Corp. sank as much as 12%. Futures on the tech-heavy Nasdaq 100 Index also declined 1.2% on Friday.

The adverse market movement spoiled the party for Lingyi iTech investors. However, many experts saw the correction as a buying opportunity for investors given the strong fundamentals of the company.

Lingyi’s expansion plans

According to the company’s prospectus, Lingyi iTech plans to use part of the Hong Kong listing proceeds to expand its manufacturing capabilities in emerging areas, including AI computing servers, humanoid robot hardware and assembly.

The company has been betting big on artificial intelligence hardware and humanoid robotics, aiming to capture growing demand for devices such as smart glasses, foldable devices and computing servers.

Lingyi’s chairman Zeng Fangqin confirmed to media houses after listing that Tesla is a client for its robotic production business, among other big names in China and the US. Zeng said that the company expects large-scale use of humanoids after 2028. The company’s Beijing factory aims to churn out 10,000 humanoids this year and ramp up production to 500,000 by the end of 2030.

More opportunities for investors

June has been Hong Kong’s busiest month for listings this year. On Friday, five companies including Lingyi iTech simultaneously made their debut on the Hong Kong Stock Exchange. These companies together raised about HK$19.8 billion ($2.5 billion) in their recent share sales.

Among the other debutants were ⁠Chinese analog chip designer SG Micro that closed up 47%, imaging equipment maker Circuit Fabology Microelectronics Equipment that closed 103% higher, Beijing Zhongke WengeAI Science and Technology that surged over 84% and Keytop Parking that shot up 203% in their debut trade.