"The performance of new shares in the same concept sector is significantly better than that of already listed stocks, indicating that capital is rotating within the sector," said Shen Meng, director at Beijing-based boutique investment bank Chanson & Co.
"The rise is driven by short-term incentives for new share subscriptions rather than investors' focus on the long-term fundamental development of the sector," he added. "Funds pursue gains from new‑share subscriptions instead of betting on corporate potential."
Enflame is one of a group of Chinese AI chip startups sometimes called the "four little GPU dragons", alongside Moore Threads 688795.SS, MetaX 688802.SS and Biren Technology 6082.HK.
Enflame sold 43.04 million new shares, equal to 10% of its enlarged share capital, on Shanghai's tech-focused STAR Market. Its offer price gave it a market value of about 61.2 billion yuan, according to its filing on Wednesday.
At its closing price of 397 yuan on Friday, Enflame's market value had jumped to roughly 171 billion yuan, nearly 2.8 times the valuation at the IPO price.
Tencent 0700.HK is Enflame's largest shareholder, with a 17.95% stake after the offering, and was also the company's largest customer before the listing. Sales linked to Tencent accounted for 83.79% of Enflame's 2025 revenue, its prospectus showed.
Enflame has yet to turn a profit. Its net loss narrowed to 1.16 billion yuan in 2025 from 1.51 billion yuan a year earlier, while revenue rose 37% to 990.2 million yuan, the prospectus showed.
The company forecast revenue of 2.3 billion yuan to 3 billion yuan for the first nine months of 2026, alongside a net loss of 700 million yuan to 860 million yuan. It expects to break even or become profitable in 2026 or 2027, depending on revenue growth and margins, the filing showed.
The company plans to use most of the IPO proceeds to develop its fifth- and sixth-generation AI chips, related software and large scale computing systems, according to its prospectus.
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