Hisense unit leaps in Hong Kong debut amid rush of mainland Chinese corporate spin-offs

Hisense Group Holdings' optical communications unit made a robust opening on the Hong Kong stock market following a HK$5.6 billion (US$714 million) IPO, fueling a surge of mainland Chinese conglomerates seeking overseas funding to fuel tech growth. Fibre-optic communications firm Ligent Technologies saw its shares soar up to 19.2 percent on Tuesday, valuing the company above HK$35 billion.

The spin-off retains a 40.1 percent ownership in Ligent, which shares its headquarters in Qingdao, Shandong province, China. Affiliates of Ligent include Shanghai-listed Hisense Visual Technology and dual-listed Hisense Home Appliances Group. The Hong Kong exchange is considering reducing the waiting period for spin-offs from three years to just one, as announced in a consultation paper released on Monday.

At least seven mainland Chinese firms have announced plans to spin off units and list on the Hong Kong exchange, including Fosun International, which filed for a HK$1.2 billion IPO for its holiday resort business Club Med. Xinyi Glass, GenScript Biotech and Sunny Optical Technology have also announced spin-off intentions this year.

According to BDO managing director Andrew Lam, the move benefits new and hi-tech enterprises with significant funding requirements, allowing them to list mature units quickly and repurpose the proceeds for overseas acquisitions. During the IPO ceremony, Hisense Group CEO and Ligent chairman Yu Zhitao emphasized the importance of the Hong Kong listing for expanding the global artificial intelligence economy.

"The Hong Kong listing provides a launch pad to expand Ligent's global [research and development], manufacturing and delivery capabilities to integrate into global AI computing networks," Yu stated.