China’s memory chipmaker CXMT became the country’s largest listed company onshore after its shares surged 472 per cent in their Shanghai debut on Monday, underscoring strong investor appetite for artificial intelligence and China’s push for semiconductor self-reliance.
The robust debut came after the company raised as much as 66.6 billion yuan (around $9.8 billion) in the second-largest initial public offering in China’s history.
CXMT, formerly known as ChangXin Memory Technologies, sold 6.688 billion shares at 8.66 yuan apiece through the IPO, before an overallotment option.
The stock’s sharp rise pushed CXMT’s market value above that of Industrial and Commercial Bank of China, making it the largest company listed on mainland Chinese exchanges.
The debut was closely watched by investors as a test of appetite for China’s semiconductor sector following recent volatility in technology stocks.
CXMT IPO draws massive demand
The IPO attracted strong demand from retail investors. The retail portion of the offering was oversubscribed 212 times, with 9.4 million individual investors submitting orders worth 7.07 trillion yuan.
The enthusiasm reflects growing investor interest in the memory chip industry, which has become a key beneficiary of the global artificial intelligence boom.
CXMT manufactures dynamic random-access memory, or DRAM, chips used in smartphones, computers and servers. It is the world’s fourth-largest DRAM maker after Samsung Electronics, SK Hynix and Micron Technology.
The company has also emerged as one of China’s most important semiconductor champions as Beijing seeks to reduce the country’s dependence on foreign chip suppliers.
CXMT is working to expand its presence in advanced memory technologies, including high-bandwidth memory, or HBM, which is increasingly important for AI data centres.
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From losses to explosive growth
CXMT’s IPO comes after a sharp improvement in its financial performance as memory chip prices recovered.
The company expects first-half revenue to rise more than sevenfold to between 110 billion yuan and 120 billion yuan. It has forecast a net profit of 66 billion yuan to 75 billion yuan, reversing a loss in the year-earlier period.
CXMT has said that demand from AI applications helped drive the latest recovery in the DRAM market.
However, the company has also warned that the market could weaken if AI investment slows or competitors add excessive supply.
Analysts have pointed to the company’s strong position in China’s semiconductor substitution drive, while also cautioning that CXMT still has a technology gap with global memory chip leaders.
Morningstar analyst Jing Jie Yu said CXMT was well placed to benefit from rising domestic AI demand, but its technology gap with global competitors could limit its share of the market for memory chips used in AI systems.
Valuation and AI demand
Before the debut, CXMT’s IPO valuation was seen as relatively attractive compared with global memory chipmakers.
The IPO price implied a price-to-book ratio of about 2.4 times. That was a 56 per cent discount to the average ratio for global DRAM peers SK Hynix, Micron Technology and Nanya Technology, according to Bloomberg Intelligence.
The discount was even steeper compared with Chinese chipmakers Semiconductor Manufacturing International Corp. and Hua Hong Grace Semiconductor.
The listing has therefore attracted investors seeking exposure to two of the biggest investment themes in China: artificial intelligence and technological self-reliance.
Huaxi Securities has projected that CXMT could reach a market value of 5 trillion yuan at 40 times its estimated 2026 earnings.
The brokerage expects CXMT’s revenue to more than double to 572.7 billion yuan by 2028 from an estimated 277.7 billion yuan this year. It projects net profit could rise to 290 billion yuan.
Limited float could fuel volatility
Only about 6.73 per cent of CXMT’s enlarged share capital was freely tradable at the time of listing, with most shares subject to lock-up restrictions.
The limited free float could amplify price movements and contribute to heavy trading volumes.
Newly issued stocks on mainland exchanges are also not subject to the usual daily trading limits during the first week after their debut.
CXMT’s 472 per cent gain follows a series of spectacular performances by Chinese technology companies.
Semight Instruments surged 876 per cent on its first trading day in April, while MetaX Integrated Circuits Shanghai jumped 693 per cent in December. Moore Threads Technology, another closely watched Chinese chipmaker, rose 425 per cent on its debut.
CXMT debut could boost China’s chip IPO pipeline
The successful listing could also build momentum for other Chinese technology companies preparing to tap public markets.
Potential IPO candidates include rival memory chipmaker Yangtze Memory Technologies and Baidu’s chip unit Kunlunxin. AI startup DeepSeek could also file for an IPO as soon as this year, according to people familiar with the matter.
CXMT’s debut was also closely watched because large IPOs can temporarily drain liquidity from Chinese stock markets.
HSBC Qianhai Securities had warned that the offering could put pressure on market liquidity before and during the debut. However, previous technology listings have also been followed by a rebound in liquidity.
CXMT could become eligible for inclusion in the Stock Connect programme during a third-quarter review in late August, with inclusion potentially taking effect in mid-September.
That would make it easier for global investors to access the stock.
For China, however, CXMT’s blockbuster debut represents more than a successful IPO. The 472 per cent surge is a powerful market endorsement of the country’s semiconductor ambitions and its broader effort to build a domestic technology ecosystem capable of supporting the artificial intelligence boom.
With inputs from agencies.
