Editorial | Hong Kong investment fund makes smart move to ride local unicorns

Investors are always chasing good growth stocks, and artificial intelligence (AI) shares are the new darlings. The government-owned Hong Kong Investment Corporation (HKIC) has joined the fray.

It has formed its first commercial partnership with home-grown unicorn SmartMore, an AI specialist that produces visual inspection machines for industrial production and assembly lines, which already has more than 300 clients around the world, including such household names as Apple, Tesla and BYD.

With HK$62 billion (US$7.9 billion) under management, the HKIC is the city’s closest thing to a sovereign wealth fund. As Financial Secretary Paul Chan Mo-po said in his budget, the fund will play a key role in promoting Hong Kong as an innovation and technology hub.

The HKIC has not disclosed how much it will invest in SmartMore. The tech firm has promised to list on the Hong Kong stock market. It will also set up an academy to train AI talent in the city and explore opportunities across the Greater Bay Area.

The news came as QuantumPharm, a pharmaceutical company using AI-powered research to make new drug discoveries, debuted in Hong Kong. The offer was oversubscribed 103 times. The price of shares rose 25 per cent, but is now closer to the IPO price of HK$5.28.

Investor enthusiasm for a firm that has yet to make a profit – its listing being allowed under new stock market rules – may signal a nascent recovery of the IPO market. Confidence was probably boosted by Tencent, which owns 12.91 per cent of the shares. Other big shareholders include Google and SoftBank.