CXMT shares rose 466% on their Shanghai trading debut, briefly making the memory chipmaker China’s most valuable listed company. The $8.5bn listing is mainland China’s largest since 2010, and it lands as Beijing pushes to build an AI chip supply chain insulated from US export controls.
CXMT shares surged 466% on their trading debut in Shanghai on Monday, briefly turning the memory chipmaker into China’s most valuable company as AI fever gripped the country’s stock market. The stock closed at Rmb49, up from an IPO price of Rmb8.66, lifting the group’s market value to as much as Rmb3.7tn ($547bn) during Monday trading and briefly eclipsing Hong Kong-listed Tencent.
Mainland China’s largest IPO since 2010
The Hefei-based group raised $8.5bn from selling 6.7bn shares, making it mainland China’s largest initial public offering since Agricultural Bank of China in 2010. CXMT holds an option to sell an additional 1bn shares.
Scarcity amplified the move. According to Anna Macdonald, investment strategy director at Hargreaves Lansdown, speaking to the BBC’s Today programme: “only 7% of the shares are available for trading”, and analysts said demand far outstripped supply. The debut also offers comfort to Chinese officials rolling out measures to curb a market slump that wiped out more than $1.5tn in recent weeks.
AI demand flipped the chipmaker to profit
CXMT is the world’s fourth-largest producer of DRam, the chips used in devices from servers to cameras, behind SK Hynix, Samsung Electronics and Micron. A surge in demand from AI inference has triggered shortages and price rises, and the company turned profitable this year, raking in Rmb33bn ($4.9bn) in the first quarter alone after Rmb37bn of losses over the past decade.
Investors paid up for that reversal. The buying pushed CXMT’s price-to-earnings ratio above 1,600. Nomura then initiated coverage with a target price of Rmb116 a share, more than 1,200% above the IPO price.
Export controls still cap the top end
Some investors and analysts warned that as Chinese production increased, memory chip prices could fall, posing a threat to established DRam makers such as Samsung and SK Hynix. CXMT is developing HBM chips but lags global rivals, in large part because US export controls have barred it from accessing the most advanced manufacturing tools from Netherlands-based ASML.
Meanwhile, research firm SemiAnalysis estimated CXMT would have capacity to start 350,000 new wafers a month by the end of this year — close to Micron’s 385,000 — and reach 500,000 by the end of 2028.
Sources: Financial Times, BBC News
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