Shares in China's biggest memory chip maker soared by nearly 470% on its first day of trading on the Shanghai Stock Exchange, making it the most valuable listed company in mainland China. The blockbuster debut of ChangXin Memory Technologies (CXMT) pushed its stock market valuation to around 3.3 trillion yuan ($487bn; £365bn), defying a global sell-off in technology stocks this month.
The spectacular jump was driven by demand far outstripping supply — only 7% of shares were available for trading, according to Anna Macdonald, investment strategy director at Hargreaves Lansdown. "The reason for the extraordinary bounce this morning is that only 7% of the shares are available for trading," she told the BBC's Today programme.
“Chinese chipmaker CXMT shares surge nearly 470% on debut, becoming mainland China's most valuable listed company.”
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. The company said it plans to use most of the proceeds from its initial public offering (IPO) to boost production and carry out more research and development.
The stellar 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 ahead with plans to make its technology industry self-reliant.
The Dram market is dominated by South Korean tech giants Samsung Electronics and SK Hynix and US-based Micron, which together account for around 90% of global production. Earlier this month, SK Hynix raised $26.5bn (£19.8bn) in its New York share offering — the largest ever listing by a foreign firm in the US. The company, a key supplier to AI chip giant Nvidia, saw its shares surge as much as 17% on their first trading day on the Nasdaq.
Memory prices have more than doubled in recent months and are still rising, after once being an affordable component. Some big tech firms have hiked the price of popular gadgets, such as tablets and video game consoles, to cope with rising component costs. Ellie Wong, an analyst at technology research firm TrendForce, told Reuters such 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," Wong said.