Chipmaker CXMT vaults to top of China's valuation with 466% surge in Shanghai debut

In other Asian markets, tech-heavy South Korea's KOSPI .KS11 and Taiwanese stocks .TWII were up nearly 1% and down 0.5%, respectively, while MSCI's IT index for Asia-Pacific shares outside Japan .MIAPJIT00NUS fell 4.7%. Only 6.73% of CXMT's enlarged share capital was freely tradable at listing, as most shares are locked up. The small initial float could magnify price swings and attract strong turnover. CXMT, formerly ChangXin Memory Technologies, raised 57.92 billion yuan ($8.6 billion) in the IPO, the biggest mainland Chinese semiconductor offering on record. It surpasses SMIC's 0981.HK $7.5 billion Shanghai share sale in 2020 and the IPO proceeds could rise to 66.61 billion yuan if an over-allotment option is fully used. Asian chipmakers and companies building data centers and related infrastructure have ridden a wave of spending worth hundreds of billions of dollars from big tech firms. Earnings from so-called hyperscalers this week are likely to set the tone for near-term sentiment around the AI trade. "The memory market remains tight with price increases expected to continue through the end of 2027," Ellie Wong, an analyst at TrendForce, a technology research firm, said. "Amid persistent supply shortages, many customers are seeking to diversify their memory supplier base, which should significantly benefit CXMT and create more business opportunities." In its prospectus, CXMT said AI demand had fuelled the latest upswing in memory chips, but warned the market could weaken if AI investment slowed or rivals added too much supply. The company expects first-half revenue to rise more than sevenfold to 110 billion yuan to 120 billion yuan. It expects net profit of 66 billion yuan to 75 billion yuan, reversing a year-earlier loss. The strong debut provides a gauge of how much investors are willing to pay for a marquee Chinese chip firm, as local markets navigate volatility following an AI-led selloff. Around 141.1 billion yuan worth of CXMT shares were traded in Shanghai on Monday, becoming the first A-share stock to exceed 100 billion yuan turnover in a day, according to local media reports. Chinese chipmaking .CSI932087 shares dropped 0.4% while semiconductor firms .CSIH30184 climbed 0.8%, as fund managers repositioned for CXMT shares. "Investor appetite is largely being driven by providing Chinese investors a way to meaningfully get exposure to the current memory supercycle," said Jing Jie Yu, equity analyst at Morningstar. Yu said the deal was priced at a steep discount, at roughly one times Morningstar's estimated 2027 price-to-book value versus 2.1 to 2.3 times for global peers. But he argued the stock's first-day surge was excessive, pointing to the memory sector's cyclical nature and the longer-term drag from U.S. export controls that restrict access to advanced chipmaking technology. CXMT's astronomical rally, which values it at nearly half of U.S. rival Micron MU.O, has also sparked concerns of a bubble. Its expanding dominance in China has enabled it to raise prices for tech customers such as Huawei. "The (CXMT) stock is too expensive and smells of speculation," said Yuan Yuwei, hedge fund manager at Trinity Synergy Investments, adding that "it's hard to say the optimism is sustainable." AI-linked stocks, including chipmakers, have been at the forefront of global equity market gains this year. But concerns about stretched valuations and whether hefty AI-related capital expenditures will generate earnings growth quickly enough have recently dampened investor enthusiasm. Shares of CXMT Corp 688825.SS soared 466% on their Shanghai trading debut on Monday following Asia's biggest IPO this year, catapulting the chipmaker to the top of China's stock market by valuation despite a recent selloff in global tech stocks. As U.S. curbs intensify competition in the global semiconductor race, CXMT has emerged as a key pillar of Beijing’s drive to build a self-sufficient chip industry and close the gap in strategic technologies such as artificial intelligence. The stock ended at 49 yuan, compared to its sale price of 8.66 yuan per share, after reaching an intraday high of 55.03 yuan. The rally lifted CXMT's market capitalisation to 3.3 trillion yuan ($487.73 billion), sharply up from $85.5 billion during the IPO process. The explosive debut crowned CXMT as China's most valuable listed company, overtaking banking giant Industrial and Commercial Bank of China, long the market's heavyweight. The chipmaker's first-day gain also dwarfed the debut performance of China Resources New Energy 001248.SZ, whose shares more than doubled after a $3.6 billion IPO earlier this month.

Chipmaker CXMT vaults to top of China's valuation with 466% surge in Shanghai debut

IPO size, supply tightness and outlook

Trading surge and analyst views on valuation

Shanghai debut sends CXMT to top of China's market

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