(March 13): DreamSmart Group, the smartphone maker that last year pivoted toward developing artificial intelligence for mobile devices, has selected banks to prepare for its Hong Kong initial public offering that may value it at more than 15 billion yuan (RM9.8 billion).

The startup behind popular smartphone brand Meizu is working with China International Capital Corp and Huatai Securities Co on the potential share sale this year, the people said. The company, owned by Chinese automaker Zhejiang Geely Holdings Group Co, 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 lineup and size may change, the people said. A representative for DreamSmart declined to comment, while representatives for CICC and Huatai didn’t 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 Corp. Once backed by Alibaba Group Holding Ltd, 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 Co. Billionaire Li Shufu’s auto 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 Corp to device makers such as Samsung Electronics Co trying to infuse AI into their gadgets.

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