Chinese memory chipmaker CXMT Corp made a stunning debut on the Shanghai stock market on Monday, with its shares jumping more than 500% after raising US$8.6 billion in Asia’s biggest initial public offering (IPO) this year.
The rally pushed CXMT’s market capitalisation to 3.65 trillion yuan (US$539.21 billion), up sharply from about US$85.5 billion during the IPO process. The surge also made CXMT the most valuable company listed in China, overtaking Industrial and Commercial Bank of China (ICBC), which previously held the top position.
CXMT shares climbed to 54.65 yuan during the session, compared with the IPO price of 8.66 yuan per share. The strong debut came despite recent weakness in global technology stocks following concerns over stretched artificial intelligence (AI) valuations.
The company, formerly known as ChangXin Memory Technologies, has become a key part of China’s effort to strengthen its domestic semiconductor industry as geopolitical tensions and US restrictions continue to shape the global chip race.
CXMT’s first-day rally exceeded the more than doubling seen by China Resources New Energy following its US$3.6 billion IPO earlier this month.
The semiconductor company recorded 122 billion yuan in trading volume during Monday morning’s session, becoming the first A-share stock to surpass 100 billion yuan in daily turnover, according to local media reports.
However, the sharp rise has also raised concerns among some investors over whether the valuation has moved too far too quickly.
“At such a price, I don’t dare to hold, or buy the stock,” said Wu Zhou, fund manager at Shenzhen Deyuan Investment, who bought CXMT’s IPO shares before selling them once trading began.
Yuan Yuwei, hedge fund manager at Trinity Synergy Investments, also warned that the rally could be driven by speculation.
“The (CXMT) stock is too expensive and smells of speculation,” Yuan said, adding that “it’s hard to say the optimism is sustainable.”
Only 6.73% of CXMT’s enlarged share capital was available for public trading after its listing, with most shares locked up. The limited free float could contribute to larger price swings as demand remains high.
CXMT raised 57.92 billion yuan (US$8.6 billion) from its IPO, making it the largest semiconductor offering on record in mainland China. The fundraising surpassed Semiconductor Manufacturing International Corp’s (SMIC) US$7.5 billion Shanghai share sale in 2020, with proceeds potentially rising to 66.61 billion yuan if an over-allotment option is fully exercised.
The strong investor appetite comes as demand for memory chips remains supported by AI development and rising investment in data centres.
“The memory market remains tight with price increases expected to continue through the end of 2027,” said Ellie Wong, an analyst at technology research firm TrendForce.
“Amid persistent supply shortages, many customers are seeking to diversify their memory supplier base, which should significantly benefit CXMT and create more business opportunities.”
Morningstar analyst Jing Jie said CXMT was positioned to benefit from growing domestic AI demand, although its technology gap with global leaders could limit its ability to capture a larger share of the AI memory chip market.
CXMT said in its prospectus that AI demand had helped drive the latest recovery in the memory chip sector, although it warned that the market could weaken if AI investment slows or competitors expand supply aggressively.
The company expects first-half revenue to rise more than sevenfold to between 110 billion yuan and 120 billion yuan, while net profit is projected at between 66 billion yuan and 75 billion yuan, reversing a loss recorded in the previous year.
Meanwhile, other Asian technology markets faced pressure on Monday, with South Korea’s KOSPI and Taiwan stocks falling more than 1%, while MSCI’s Asia-Pacific IT index outside Japan declined 0.5% as investors adjusted positions following CXMT’s debut.
Reuters
