China's Memory Leader CXMT Records 212:1 IPO Subscription Rate in Shanghai...14 Trillion Won Rushed In

Changxin Memory (CXMT), a leading Chinese memory semiconductor company, successfully launched its 9.8 billion dollar (approximately 14 trillion won) IPO, drawing significant interest from individual investors. CXMT reported an online subscription rate of approximately 212:1 for its private investor offering ahead of its Shanghai Science and Technology Innovation Board (STAR Market) listing. Over 9.4 million individual applications were received, with a final winning probability of 0.47%. CXMT issued 769 million shares (including oversubscription options) at 8.66 yuan per share, raising about 66.6 billion yuan (9.8 billion dollars), making it the second-largest IPO in China since the 2010 Agricultural Bank of China IPO. Post-listing market capitalization is projected at 580 billion yuan (127 trillion won). As the fourth-largest DRAM manufacturer, CXMT produces memory for smartphones and AI servers, particularly notable in high-bandwidth memory (HBM) for AI data centers. Analysts note the offering price is below earnings, signaling potential post-IPO price increases. Valuation at 5.9x earnings versus the industry average of 20x suggests undervaluation. However, investor sentiment is more cautious compared to previous large IPOs, with the 212:1 subscription rate still lower than SMIC's 471:1 in 2020. Concerns about market liquidity absorption due to the 20% decline in the STAR50 Index since July are cited. China's state media, Shanghai Securities News, stated market liquidity remains sufficient and emphasized CXMT's role as a core player in the STAR Market to share China's advanced technology industry growth. The successful IPO is expected to positively impact subsequent semiconductor IPOs in China, with companies like Yangtze Memory (YMTC) and Baidu's AI semiconductor subsidiary Kunlunxin under consideration for listings, along with DeepTech's potential IPO this year.