SG Micro plans Hong Kong listing

SG Micro plans Hong Kong listing

Chinese technology company SG Micro Inc. has announced plans for a secondary public listing in Hong Kong, which could raise up to $300 million in fresh funds. The company has hired Bank of America, JPMorgan, and China International Capital Corp. (CICC) to work on the listing, scheduled for February 2026 [1].

The move comes amid growing concerns over potential forced delistings of Chinese companies from U.S. exchanges due to the ongoing trade war between the U.S. and China. This trend has driven a number of Chinese companies to seek capital via initial public offerings (IPOs) or secondary listings in Hong Kong [2].

SG Micro, controlled by a major Chinese internet giant, has seen its share prices increase by 23.62% week-on-week following the announcement of its Hong Kong listing plans. The company plans to file its application in the third quarter of 2025, with the listing expected to happen before the 2026 Lunar New Year in mid-February [1].

The company's latest earnings report for the second quarter of 2025 showed a larger-than-expected loss, with earnings per share (EPS) of -0.14 compared to a forecast of -0.03. This significant miss led to a 4.42% drop in the stock price during pre-market trading, reflecting investor disappointment [3].

Historically, similar earnings misses by SG Micro have not led to positive returns for investors. A backtest of the stock’s performance following earnings misses from 2022 to the present reveals a consistent pattern of underperformance, with a 0% win rate across 3-day, 10-day, and 30-day timeframes. This suggests that the market has historically failed to recover or capitalize on value post-earnings disappointments, compounding risks for investors.

Despite these challenges, SG Micro remains optimistic about its future prospects. The company plans to focus on AI-powered entertainment experiences and expand its micro drama production. It is also exploring new monetization strategies and aims to continue its global expansion, particularly in Southeast Asia, North America, Japan/Korea, and the Middle East/North Africa [3].

References:
[1] https://www.reuters.com/business/media-telecom/chinas-iqiyi-hires-banks-up-300-million-second-listing-hong-kong-sources-say-2025-08-19/
[2] https://ca.news.yahoo.com/chinas-iqiyi-taps-banks-300-101343864.html
[3] https://www.investing.com/news/transcripts/earnings-call-transcript-iqiyi-q2-2025-earnings-miss-and-stock-dip-93CH-4202258