ZJ INNOLIGHT (03308) experienced a sharp decline of 5.00% in intraday trading on its first day of listing, with the stock price falling significantly below its initial public offering price of HK$980. The optical interconnect solutions provider made its trading debut on the Hong Kong Stock Exchange on Thursday morning.

The weak debut performance follows a backdrop of sector-wide pressure. Just days earlier, on July 28, ZJ INNOLIGHT's A-shares plunged over 15%, contributing to a broader sell-off in the CPO (co-packaged optics) sector that wiped out over RMB 330 billion in market value from leading optical module makers. This occurred amid market rumors of aggressive price cuts for 1.6T optical modules, which the company has since refuted, stating that the actual average selling price is far higher than market speculation and that delivery remains tight.

Despite strong demand for the IPO, with the Hong Kong public offering tranche oversubscribed by 16.84 times and the international placement by 9.73 times, the stock opened below its offer price and extended losses. The listing, which raised approximately HK$52.9 billion, marks Hong Kong's largest share sale since Alibaba's 2019 listing. However, negative sentiment surrounding the AI and chip sectors in Asia, coupled with concerns over the company's A-share performance, has weighed heavily on the H-share debut.