China's largest DRAM maker, ChangXin Memory Technologies (CXMT), has debuted on the Shanghai stock market and immediately become the most valuable company listed on mainland Chinese exchanges.
CXMT, the world's fourth-largest DRAM supplier, began trading on the Shanghai Stock Exchange's STAR Market—also known as the Sci-Tech Innovation Board—on the 27th. The stock closed its first trading day at 49.0 yuan, up 465.82% from its IPO price of 8.66 yuan.
According to Chinese portal Baidu, CXMT shares surged to 49.88 yuan, a gain of 476%, shortly after the market opened. They later reached an intraday high of 55.03 yuan, up 535.45% from the IPO price.
Stocks newly listed on the STAR Market are not subject to daily price-movement limits during their first five trading days.
At the closing price, CXMT's market capitalization reached 3.28 trillion yuan, or approximately 711.7 trillion KRW. That easily surpassed Industrial and Commercial Bank of China (ICBC), the previous leader, whose market capitalization stood at 2.76 trillion yuan, or about 598.9 trillion KRW. Samsung Electronics, SK hynix, and Micron each have market capitalizations in the 1,000-trillion-KRW range.
In its recent IPO, CXMT issued 6.688 billion new shares at 8.66 yuan apiece, raising 57.92 billion yuan, or roughly 12.50 trillion KRW. The offering represented 10% of its total shares outstanding and implied a market capitalization of 579.2 billion yuan, or approximately 12.51 trillion KRW.
Including an overallotment option, CXMT could issue up to 7.69 billion new shares, potentially raising as much as 66.61 billion yuan, or around 14.40 trillion KRW.
The IPO is the largest in Asian equity markets so far this year. It also exceeds Semiconductor Manufacturing International Corp.'s (SMIC) USD 7.5 billion listing in 2020, making it the largest IPO ever by a Chinese semiconductor company. It is the second-largest listing on China's mainland stock market since Agricultural Bank of China raised USD 10 billion in 2010.
According to Counterpoint Research, Samsung Electronics held a 38% share of the global DRAM market by revenue in the first quarter, followed by SK hynix at 29% and Micron at 22%. CXMT's share jumped to 8%, up from 3% a year earlier.
CXMT plans to use the IPO proceeds to expand its manufacturing capacity and advance its DRAM technology.
Morningstar said CXMT could benefit from rising AI-related demand in China. However, the research firm cautioned that CXMT's technology gap with industry leaders may limit its ability to gain meaningful share in the AI chip market.
