Investor excitement over the memory chip trade is setting outsize expectations for the Shanghai debut of CXMT Corp., which is on the brink of making history after a near-record initial public offering.The company formerly known as ChangXin Memory Technologies Corp. is poised to become the biggest China-listed firm on its very first day of trading after raising 66.6 billion yuan ($9.8 billion).
Valuation multiples, a well oversubscribed IPO and shadow market bets all point in the direction of a debut pop that could boost the company’s market value several times above the initial 580 billion yuan.China’s homegrown champion is tapping into the voracious appetite for the memory chip story, a fulcrum of the global artificial intelligence buildout.
As the world’s fourth-largest maker of dynamic random-access memory, or DRAM — the chips that underpin everything from smartphones to AI servers — CXMT has emerged as Beijing’s best hope of reducing dependence on foreign suppliers in areas including high-bandwidth memory, a critical component for AI data centers. “As the undisputed leader in China’s substitution story, there will be plenty of funds willing to buy once it pulls back to below 2 trillion yuan in value,” said Zeng Jiqing, a fund manager at Beijing Nuohua Investment Management Co, adding that he expects the company to take the crown as the most valuable company soon after trading begins.The company sold 6.688 billion shares, before an overallotment option, at 8.66 yuan apiece to notch an onshore IPO surpassed only by Agricultural Bank of China Ltd.’s $10 billion share sale in 2010.The sequence of sixes and eights — numbers traditionally associated with good fortune and prosperity in Chinese culture — is unlikely to be accidental, underscoring the significance of a listing that has become a symbol of the nation’s semiconductor ambitions. 132650467Hefei, Anhui-based CXMT is buttressed by retail investor demand, attractive valuations, and renewed signs of state-backed support for markets.The retail portion of the IPO was 212 times oversubscribed, with individual investors submitting 9.4 million orders for 7.07 trillion yuan worth of shares — about 10 times the retail order book of SpaceX’s world record IPO.
