[SINGAPORE] The meteoric surge of ChangXin Memory Technologies’ (CXMT) shares upon its Shanghai debut on Monday (Jul 29) has caught the attention of investors.
Its shares jumped by over 500 per cent on the day of its initial public offering (IPO), leading the firm to become mainland China’s most valuable listed company.
The IPO had an initial valuation of 8.66 yuan per share, with 6.7 billion shares representing 10 per cent of its free-float post-issuance, giving the firm a market capitalisation (market cap) of 579 billion yuan (US$85.5 billion). The rally, however, has since caused its market cap to soar to 3.3 trillion yuan.
CXMT’s blockbuster IPO comes as many other chip stocks globally sank into the red.
For example, South Korean chip leader SK Hynix was down 8.9 per cent on the Nasdaq after missing consensus estimates, despite a record Q2 profit, while Taiwan’s TSMC dipped nearly 3 per cent, including shedding NT$2 trillion (US$61.7 billion) in market cap at one point.
Singapore semiconductor plays such as AEM and UMS also declined by as much as 8.5 per cent on Tuesday.
With its valuation surge, investors may want to know how solid CXMT’s standing is in the chip world – or if it is just riding on temporary hype. Here’s what those in the industry say.
What does CXMT do and how well is it doing?
The Chinese semiconductor integrated device manufacturer is a key producer of dynamic random-access memory (Dram) chips – used in many electronic devices from smartphones to servers and AI systems. It specialises in Dram design, manufacturing and research and development.
It is the fourth-largest Dram supplier globally after Samsung, SK Hynix and Micron, with a market share of nearly 8 per cent last year, according to its IPO prospectus.
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Its first-quarter revenue jumped to 50.8 billion yuan – a whopping 719 per cent rise from a year earlier. Its net profit surged 1,268 per cent to 33 billion yuan. Its clients include Alibaba Cloud, ByteDance, Tencent, Lenovo, Xiaomi, Oppo, Vivo and others.
Dram chip production as a field also remains “hot” in the medium and long term, as the memory supercycle is set to run through 2027 and 2028, despite a broader chip stock rout now, according to analysts. Memory chips have been in demand since the AI boom started.
Consumer Dram products of CXMT, in particular, are capable of meeting the specifications of various electronics players – especially those who seek to diversify their supply chains in the event of future shortages, said Morningstar equity analyst Jing Jie Yu.
Where does CXMT stand in the memory chip sector?
Can the Chinese company, however, compete with top chip giants such as SK Hynix, Samsung and Micron?
Nomura semiconductor research analysts Donnie Teng and Frank Fan are bullish on CXMT as a chip play on the rise. They have initiated a “buy” rating on the counter, with a target price of 116 yuan.
“We expect CXMT’s market share gain to accelerate considering that the global supply of memory is unlikely to ease in the coming years,” they wrote in a Monday report.
The analysts assigned the stock a target price-to-earnings multiple of 20 times as they expect CXMT to trade at two times the valuation of its major US competitor, Micron.
For context the US chipmaker had traded at about 10 times earnings over the last five years.
Morningstar’s Jing, however, offered a contrarian view, saying that CXMT still has “catching up to do” with other major chip players – and will face “increasing difficulty in doing so”.
He explained that the chipmaker is currently two generations behind its peers and will face more difficulty in closing this gap due to a lack of access to specialised systems such as extreme ultraviolet lithography machines.
The technology will be used by the other big three memory leaders in manufacturing the next generation of Dram chips.
Jing has a target price on CXMT of 16.10 yuan, saying the shares are now “overvalued” as the market is overly optimistic about the Chinese firm’s ability to maintain high memory prices and profitability.
“The share price exuberance is largely driven by strong enthusiasm by onshore investors finally having a meaningful way to trade on the memory supercycle, but (we) see valuations as decoupled from fundamentals,” he said on Tuesday.
CXMT’s opening price on Monday at 49.50 yuan implies an approximate 2027 price-to-book-ratio of 5.7 times, he told BT – which would be over double that of memory players under his coverage.
He disagreed with this value, however, due to CXMT’s “lagging technological capabilities” compared with global memory leaders.
That said, Jing forecast a 10 per cent Dram bit shipment share for CXMT in 2026 – up slightly from 9 per cent in 2025 – due to rising demand for its products from global consumer electronics players, amid a global memory shortage and accelerating domestic AI demand.
