Geely-backed smartphone maker DreamSmart taps CICC, Huatai for potential Hong Kong IPO, sources say

DreamSmart Group, the smartphone maker that last year pivoted towards developing artificial intelligence (AI) for mobile devices, has selected banks to prepare for its Hong Kong initial public offering (IPO) that may value it at more than 15 billion yuan (US$2.1 billion).

The start-up behind popular smartphone brand Meizu is working with China International Capital Corp (CICC) and Huatai Securities on the potential share sale this year, the people said.

The company, owned by Chinese carmaker Zhejiang Geely Holdings Group, may seek a valuation of as much as 20 billion yuan in the offering, depending on market conditions, one of the people said.

Deliberations are ongoing and details of the IPO including bank line-up and size may change, the people said. A representative for DreamSmart declined to comment, while representatives for CICC and Huatai did not respond to requests for comment.

Founded two decades ago as a purveyor of MP3 music players, Meizu was one of the pioneers of China’s then-nascent smartphone industry alongside bigger names such as Xiaomi.

Once backed by Alibaba Group Holding, it cranked out trendy devices and an operating system that initially won acclaim, but later ceded ground to more aggressive rivals such as Oppo and Huawei Technologies.

Billionaire Li Shufu’s car company acquired the brand in 2022, which began developing AI around the time ChatGPT took the concept mainstream.

The Meizu smartphone maker is one of several firms hoping to ride a surge of investor enthusiasm in AI stocks, from suppliers of high-end computing and components such as Nvidia to device makers such as Samsung Electronics trying to infuse AI into their gadgets.

Chinese smartphone stocks look attractive, in particular, after a recent sell-off, Morgan Stanley analysts including Andy Meng wrote Monday.