Enflame Technology, a leading Chinese AI chipmaker backed by Tencent Holdings, will open share subscriptions on September 2 for its initial public offering (IPO) on Shanghai's tech-heavy STAR Market. The company aims to raise 6 billion yuan, which translates to approximately $892.21 million. This IPO is a significant step for China's semiconductor industry, aiming to bolster tech self-reliance amidst competition with the U.S.
Enflame plans to issue 43.04 million new shares, representing a 10% stake in its enlarged share capital of approximately 430 million shares. Preliminary price consultations for the offering are scheduled to begin on August 28. The total offering includes an initial 8.61 million shares allocated to strategic investors, with 27.54 million shares set aside for institutional tranches and 6.89 million for retail investors.
The proceeds from the IPO will be primarily allocated to the development and commercialization of Enflame's fifth- and sixth-generation AI chips, as well as advanced AI software and hardware collaborative innovation projects. Founded in 2018, Enflame is considered one of China's "four little GPU dragons," alongside Moore Threads, MetaX, and Biren Technology, all of which have gone public in the past year. CITIC Securities is the lead underwriter for Enflame's deal, with Guotai Haitong Securities and GF Securities serving as joint lead underwriters.
While China's onshore technology IPOs are on track for their strongest year since 2023, driven by a push to support chip and AI companies, there are concerns about market volatility. For example, shares of Unitree, a well-known humanoid robot maker, have slumped by about 45% since a significant jump on its Shanghai debut, raising questions about potential bubble risks in the enthusiasm for AI and robotics companies.
