CXMT Corp.'s debut in Shanghai follows a 66.6 billion yuan ($9.8 billion) initial public offering that was heavily oversubscribed, setting up the Chinese memory-chip maker to potentially become the most valuable listed company on the mainland in the hours or days after trading begins.
The offering comprised 6.688 billion shares priced at 8.66 yuan apiece, before any exercise of an overallotment option. That size makes it the second-largest domestic IPO in China, behind Agricultural Bank of China’s listing of roughly $10 billion in 2010.
At the offer price, CXMT’s shares imply a pre-trade market value of about 580 billion yuan. Given the special listing rules that exempt newly listed shares from daily price limits during their first five trading sessions, a substantial opening move is possible. Bloomberg calculated that a roughly 330% gain on the first day would push CXMT’s market capitalisation above Industrial and Commercial Bank of China’s 2.6 trillion yuan, which would make CXMT the largest mainland-listed company.
Demand for the allocation was driven predominantly by individual investors. The retail portion was oversubscribed 212 times, and about 9.4 million orders were entered for shares totaling 7.07 trillion yuan in notional value.
Market participants are also watching the IPO valuation. CXMT was priced at about 2.4 times book value, which represents a 56% discount relative to the average book multiple for global dynamic random-access memory producers cited in the offering, including SK Hynix, Micron Technology and Nanya Technology.
CXMT is identified as the world’s fourth-largest producer of DRAM. The company, based in Hefei, is also advancing work on high-bandwidth memory, a product that the offering notes as relevant for artificial intelligence data-centre applications, alongside more conventional uses such as smartphones and personal computers.
The Shanghai listing is presented as a vehicle for investors to gain direct exposure to Beijing’s objective of expanding domestic semiconductor production and lowering dependence on foreign suppliers. Recent Chinese listings in the AI and semiconductor complex have recorded large first-day advances: semiconductor-testing firm Semight Instruments rose 876% on its debut in April, and chip designer Moore Threads jumped 425% on its December listing.
Separately, CXMT could become eligible for the Stock Connect programme during a third-quarter review in late August, with potential inclusion effective from mid-September. Stock Connect admission would broaden access for Hong Kong-based eligible investors to Shanghai-listed shares.
Observers say a robust opening for CXMT could lend momentum to planned listings by other domestic memory and chip-related businesses, including Yangtze Memory Technologies and the Kunlunxin chip unit affiliated with Baidu, along with other Chinese technology companies seeking to list onshore.