CXMT, formerly ChangXin Memory Technologies, saw its shares surge as much as 470% in its Shanghai trading debut on Monday, quickly becoming China's most valuable listed company. The stock closed at 49 yuan, a significant jump from its IPO price of 8.66 yuan, lifting its market capitalization to 3.3 trillion yuan (approximately $487.73 billion). This spectacular debut surpassed the market cap of Industrial and Commercial Bank of China and even exceeded that of U.S. chip giant Intel, which was around $450 billion. The IPO, Asia's largest this year, raised 57.92 billion yuan ($8.6 billion), the biggest mainland Chinese semiconductor offering on record.
The explosive rally has sparked concerns about a potential bubble, with analysts like Yuan Yuwei of Trinity Synergy Investments calling the stock "too expensive" and speculating that the optimism might not be sustainable. Morningstar equity analyst Jing Jie Yu noted that the deal was priced at a steep discount, roughly one times Morningstar’s estimated 2027 price-to-book value compared to 2.1 to 2.3 times for global peers, but still considered the first-day surge excessive. The memory sector's cyclical nature and the ongoing drag from U.S. export controls, which limit access to advanced chipmaking technology, present long-term challenges.
Investor appetite was significantly driven by the current memory "supercycle" and the desire for Chinese investors to gain exposure. CXMT, as China's largest memory chipmaker, plays a critical role in the country's push for AI development amidst U.S. export controls. The company expects a substantial increase in first-half revenue, potentially rising more than seven-fold to 110 billion yuan to 120 billion yuan, and net profit of 66 billion yuan to 75 billion yuan, reversing a year-earlier loss. Around 141.1 billion yuan worth of CXMT shares were traded in Shanghai, setting a record for an A-share stock's daily turnover.
