Shares in China's biggest memory chip maker, ChangXin Memory Technologies (CXMT), surged nearly 470% on their first day of trading on the Shanghai Stock Exchange's tech-heavy Star Market, pushing its valuation to around 3.3 trillion yuan ($487bn; £365bn) and making it the most valuable listed company in mainland China.
The spectacular debut comes despite a sharp sell-off in technology stocks worldwide this month. CXMT, founded in 2016 by Chairman Zhu Yiming and headquartered in Hefei, Anhui Province, manufactures dynamic random-access memory (Dram) chips used in AI data centres, mobile phones, PCs, tablets and other devices.
“CXMT shares surge 470% on debut, making it China's most valuable listed company at $487bn.”
"The reason for the extraordinary bounce this morning is that only 7% of the shares are available for trading," Anna Macdonald, investment strategy director at Hargreaves Lansdown, told the BBC's Today programme. The limited float, analysts said, meant demand far outstripped supply, driving the surge.
The stellar IPO performance offers some comfort to Chinese financial officials, who have been rolling out measures to curb a stock market slump that wiped out more than $1.5tn in recent weeks. It also highlights Chinese investors' strong appetite for a homegrown chipmaker as Beijing pushes for technological self-reliance.
CXMT plans to use most of the IPO proceeds to boost production and fund research and development. The chipmaker enters a market dominated by South Korea's Samsung Electronics and SK Hynix and US-based Micron, which together account for around 90% of global Dram production.
Earlier this month, SK Hynix raised $26.5bn (£19.8bn) in its New York share offering, the largest foreign firm listing in the US. Its shares surged 17% on debut but later gave up some gains. SK Hynix's market value topped $1tn in May, lifted by the AI chip boom.
Memory prices have more than doubled in recent months and are still rising, pushing some big tech firms to hike prices of gadgets like tablets and video game consoles. Ellie Wong, an analyst at TrendForce, told Reuters that price increases were expected to continue until the end of 2027. "Amid persistent supply shortages, many customers are seeking to diversify their memory supplier base, which should significantly benefit CXMT and create more business opportunities," she said.