ChangXin Memory Technologies, China’s largest memory chip producer, made a dramatic entrance on the Shanghai Stock Exchange’s Star Market, with its shares jumping more than 470% on debut. The rally lifted the company’s market value to roughly 3.3 trillion yuan, or $487.3bn, putting it at the top of the list of mainland China’s most valuable listed firms.
The strong opening stood out against a broader backdrop of weakness in technology shares globally this month. CXMT, founded in 2016 by chairman Zhu Yiming and based in Hefei in eastern China’s Anhui Province, makes dynamic random-access memory, or Dram, chips used in AI data centres, smartphones, PCs, tablets and other electronics. According to the report, the company plans to direct most of the money raised in the offering toward expanding memory-chip production and increasing research and development.
Supply constraints and investor demand
Analysts said the sharp rise reflected demand for the shares far exceeding the amount available to trade. One market commentator cited in the report said only 7% of the shares were available for trading, helping drive the exceptional first-day move. The debut also underscores strong domestic investor interest in a Chinese chipmaker at a time when Beijing is pressing for greater self-reliance in technology.
The listing may also provide some relief to Chinese financial authorities, who have been trying to support a market that has lost more than $1.5tn in recent weeks. CXMT’s arrival comes as the global Dram market remains dominated by Samsung Electronics, SK Hynix and Micron, which together account for about 90% of production. The report also noted that SK Hynix recently completed a major New York share offering and that its shares rose sharply on their Nasdaq debut before giving back some of those gains.
Source: bbc.co.uk
