Shares of CXMT surged more than 500% on their Shanghai debut Monday, lifting the Chinese memory chipmaker's market value to $539 billion, or 3.65 trillion yuan.
Key Points:
- CXMT touched 54.65 yuan intraday against an IPO price of 8.66 yuan, overtaking Industrial and Commercial Bank of China as the mainland's most valuable listed company.
- Morning turnover reached 122 billion yuan, the first time any A-share stock has cleared 100 billion yuan in a single session.
- Just 6.73% of the enlarged share capital was tradable at listing, a thin float that magnified the move.
CXMT Debut Overtakes ICBC
The stock reached 54.65 yuan during the morning session, against an initial public offering price of 8.66 yuan a share. Shares opened at 49.50 yuan on the Star Market. That climb pushed CXMT past Industrial and Commercial Bank of China, the mainland market's previous heavyweight. Retail investors had bid for more than 200 times the stock set aside for them.
Turnover hit 122 billion yuan by midday, the first time an A-share stock has cleared 100 billion yuan in a single day. Only 6.73% of the enlarged share capital could trade at listing, because most holdings stay locked up. Other Chinese chipmaking stocks fell as fund managers sold positions to make room for the new listing.
Also Read: Samsung Secures Stunning $200B Broadcom Chip Deal
Yuan Yuwei Flags Speculation Risk
Yuan Yuwei, a hedge fund manager at Trinity Synergy Investments, called the price too expensive and said the rally smelled of speculation. He questioned whether the optimism can hold.
Wu Zhou of Shenzhen Deyuan Investment took IPO shares and sold the whole position once trading opened. The debut values CXMT at close to half of Micron Technology, its far larger American rival. Domestic buyers have shown a strong appetite for a homegrown chipmaker as Beijing pushes for technology self-reliance. Securities regulators had met fund managers and brokerages this month over concerns the offering would drain cash from other stocks.
DRAM Shortage Underpins CXMT Bet
Not everyone reads the move as froth. Ellie Wong, an analyst at TrendForce, said memory supply remains tight and expects contract prices to keep climbing through the end of 2027.
Morningstar analyst Jing Jie said the technology gap with global leaders could still cap CXMT's share of the AI memory market.
CXMT ranks fourth in DRAM behind Samsung Electronics, SK Hynix and Micron, and held 7.67% of the global market late last year. The company expects first-half revenue to rise more than sevenfold, to between 110 billion and 120 billion yuan.
CXMT raised 57.92 billion yuan, or $8.6 billion, in the largest mainland semiconductor offering on record, ahead of SMIC's $7.5 billion Shanghai sale in 2020. Most of the money will go toward mass-producing memory wafers and further research.
Chairman Zhu Yiming founded the company in 2016, and it operates from Hefei in Anhui province. Regulators have spent recent weeks trying to steady a market that shed more than $1.5 trillion.
Read Next: Ghost Rider And Black Panther: Prediction Markets Whiffed On Marvel's Two Biggest Casting Reveals