AI-led boom of Chinese stocks revives refinancing activities in Hong Kong

Chinese electric vehicle maker BYD raised HK$43.5 billion with its largest-ever share placement this week. Shenzhen-based AI drug discovery company XtalPi Holdings’ HK$2.1 billion secondary offering came in second and Beijing Fourth Paradigm Technology, whose AI products aid corporate policymaking, came in third with a HK$1.4 billion follow-on offering, Bloomberg data showed.

“Whether the momentum on refinancing can hold up hinges on the performance of the secondary market,” said Wang Chen, a partner at Xufunds Investment Management in Shanghai. “It looks like sentiment is quite bullish. Global funds are now rebalancing their asset allocations. If they want to invest in tech stocks outside the US, there’ll be no place like China, where there are a number of big tech names.”

Currently, the 30-member Hang Seng Tech Index, which includes Alibaba Group Holding, Tencent Holdings and BYD, trades at 27 times earnings, up from 21 times in the middle of January, according to Bloomberg data. Alibaba owns the Post. The gauge has risen 35 per cent from a January low and is in a bull market.