Shares in ChangXin Memory Technologies (CXMT) surged by more than 470% on their first day of trading on the Shanghai Stock Exchange, propelling the Chinese memory chip maker to a stock market valuation of around 3.3 trillion yuan ($487.3bn; £364.9bn) and briefly making it the most valuable listed company in mainland China in the country's biggest initial public offering (IPO) since 2010.
The spectacular debut defies a sharp sell-off in technology stocks globally this month, as investor appetite for a homegrown chipmaker underscored Beijing's push for technological self-reliance. CXMT, founded in 2016 by Chairman Zhu Yiming and headquartered in Hefei, Anhui Province, manufactures dynamic random-access memory (Dram) chips used in artificial intelligence (AI) data centres, mobile phones, PCs and other devices.
“Chinese memory chip maker CXMT surged over 470% on debut, becoming China's most valuable listed company.”
Analysts attributed the extraordinary jump to demand far outstripping supply, with only 7% of the company's shares available for trading. “The reason for the extraordinary bounce this morning is that only 7% of the shares are available for trading,” said Anna Macdonald, investment strategy director at Hargreaves Lansdown, on the BBC's Today programme.
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. CXMT said it plans to use most of the IPO proceeds to boost memory chip production and fund research and development.
The company joins a Dram market dominated by South Korea's Samsung Electronics and SK Hynix, as well as US-based Micron, which together account for about 90% of global production. Earlier this month, SK Hynix raised $26.5bn in its New York share offering — the largest ever listing by a foreign firm in the US — and saw its market value top $1tn in May, lifted by booming demand for AI chips.