Asia’s largest IPO has broken all earnings records on the day of its listing. According to Reuters report, CXMT Corp’s shares rose by more than 500 percent on the Shanghai Stock Exchange on Monday. This is Asia’s biggest IPO this year. Despite the recent decline in global technology stocks, this rally has taken the chip maker to the top of China’s stock market in terms of valuation.
The share price reached 54.65 yuan during intraday trading, while its price at the time of IPO was 8.66 yuan per share. According to a Reuters report, this tremendous rise brought CXMT’s market capitalization to approximately 3.65 trillion yuan ($539.21 billion), which is much higher than its estimated valuation of $85.5 billion at the time of IPO. This impressive market debut made CXMT China’s most valuable listed company. It overtook ‘Industrial and Commercial Bank of China’ (ICBC), which was earlier at the top in terms of market value.
Reducing dependence on foreign technology
Reuters reported that amid increasing US restrictions on advanced semiconductor technology, CXMT has emerged as an important part of China’s strategy, which aims to strengthen the domestic chip industry and reduce dependence on foreign technology. The report also said that the gain of CXMT on the first day is much more than the more than 100 percent gain seen at the time of listing of ‘China Resources New Energy’. ‘China Resources New Energy’ had launched an IPO of $3.6 billion earlier this month.
Asia’s largest IPO
CXMT raised 66.6 billion yuan ($9.8 billion) through its IPO, which is the second largest IPO in China’s history. The company, formerly known as ‘Changxin Memory Technologies’, offered 6.688 billion shares at a price of 8.66 yuan per share (not including the over-allotment option). At the opening price of 49.50 yuan, CXMT had a market valuation of about 3.3 trillion yuan.
Taking advantage of strong investor interest in the AI-driven semiconductor sector, the company has emerged as China’s leading domestic memory chip maker. CXMT, the world’s fourth-largest maker of dynamic random-access memory chips, is considered a key player in Beijing’s efforts to reduce dependence on foreign suppliers. This is especially the case with high-bandwidth memory (HBM), which is an essential component used in AI data centers.
Such listing seen after 16 years
Among listings in mainland China, this IPO is second only to Agricultural Bank of China’s share sale of approximately $10 billion in 2010. The offering also had a unique pricing structure, including figures of 66.6 billion yuan, 6.688 billion shares, and 8.66 yuan per share—numbers considered auspicious in Chinese culture—reflecting the importance of the listing. Investors showed a lot of interest in CXMT, located in Hefei, Anhui province. 212 times more subscription was received for the retail portion of the IPO. In this, ordinary investors gave 9.4 million applications worth 7.07 trillion yuan, which is almost 10 times more than the retail demand seen in SpaceX’s record-breaking IPO.
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