Chinese memory-chip manufacturer CXMT experienced an extraordinary first trading day: its shares rose from the 8.66 yuan IPO price to 54.65 yuan by mid-session. That surge pushed the company’s market capitalization from an estimated 579.2 billion yuan at listing to about 3,650 billion yuan in a single day, briefly overtaking Industrial and Commercial Bank of China (ICBC) to become China’s most valuable publicly traded company.
Drivers of the rally
Investor enthusiasm was largely driven by U.S. technology export controls, which market participants say have increased the strategic value of China’s semiconductor industry. CXMT is seen as a key domestic chip supplier expected to support China’s push for technological self-reliance, particularly in artificial intelligence.
Trading volume underscored that interest: by late morning CXMT shares had changed hands for 122 billion yuan in Shanghai, making it one of the earliest A-shares to record a daily turnover above 100 billion yuan, according to local media.
IPO proceeds and free float
CXMT raised 57.92 billion yuan in the share offering, which Reuters describes as the largest mainland China semiconductor IPO to date; if overallotment options are fully exercised the amount could rise to 66.61 billion yuan. The sum surpassed the funds raised by Semiconductor Manufacturing International Corporation (SMIC) in its 2020 Shanghai listing, which amounted to $7.5 billion.
At listing, only 6.73 percent of the enlarged share capital was freely tradable, and that low free float could further amplify price volatility.
Analyst views and risks
Ellie Wong of TrendForce expects memory-chip prices to stay elevated through the end of 2027 and says buyer-driven diversification of supply chains could benefit CXMT. By contrast, Csing Csie of Morningstar warned that although CXMT is well positioned to tap growth in China’s AI market, its technological gap versus global leaders may limit its share of the market for memory chips used in the most advanced AI systems.
The steep price rise has also prompted concerns among investors about overvaluation, given the rapid expansion in market capitalization coupled with a small public float.
Financial outlook
Operating results show marked improvement: CXMT projects first-half revenue of 110–120 billion yuan for this year, more than seven times the amount a year earlier. Net profit is forecast at 66–75 billion yuan, compared with a loss in the first half of last year.
Conclusion
CXMT’s stock-market debut delivered dramatic share-price gains and significant capital raising, briefly making the firm China’s top-listed company by market value. The rally reflects strategic investor interest amid export controls and a tight memory-chip supply, but analysts caution about overvaluation risks, volatility from a limited free float, and potential technological constraints when competing with global leaders.
Source: Reuters
This article does not constitute investment advice or a recommendation.
