CXMT shares soar after blockbuster IPO

China's largest memory chipmaker made a blockbuster debut on the Shanghai Stock Exchange's STAR Market on Monday as experts pointed to growing signs of a structural bull run in the A-share market.

In the Chinese mainland's biggest initial public stock offering in recent years, shares of ChangXin Memory Technologies, or CXMT, surged 465.82 percent to close at 49 yuan per share, propelling its market value to more than 3 trillion yuan ($443 billion) and making it the most valuable company on the A-share market on its first trading day. CXMT not only overtook the United States peer Intel in market value, but also dethroned the Industrial and Commercial Bank of China as the domestic market's top-weighted company.

The company raised at least $8.6 billion with the offering, priced at 8.66 yuan per share.

The feverish trading was underscored by a record-shattering 140-billion yuan single-day turnover, reflecting a strong investor appetite for high-tech domestic champions as China presses ahead with its push for technological self-reliance.

Wu Hao, a portfolio manager at Founder Fubon Fund, said that CXMT's IPO completes the most critical piece of a puzzle for the A-share market's memory sector. "It gives China its first homegrown DRAM powerhouse with global heft, sharpening the investment case across the memory value chain," he said.

From equipment and materials to design, manufacturing and packaging, the story of CXMT is now shifting from concept validation to earnings realization, he added.

DRAM, or dynamic random access memory, is the main type of memory that computers and servers use to run programs and process data in real time. With artificial intelligence-driven demand on the rise, the market is at the starting point of a new memory cycle in which the demand for memory chips will be substantially boosted given the rollout of more AI models and applications, said experts at Sinolink Securities.

Analysts at Huaxi Securities estimated that CXMT's market cap may stabilize at 2 to 3 trillion yuan in a base-case scenario, with upside to 4 trillion yuan under bullish assumptions.

But the real significance lies beyond the numbers. By filling the long-missing gap of a homegrown DRAM manufacturing heavyweight, the listing is set to upend the skewed valuation framework of the A-share memory segment and, in the long run, reshape the entire semiconductor sector's pricing logic, they said.

Donnie Teng, a semiconductor and tech research analyst at Nomura, gave CXMT a buy rating and a 116-yuan target, projecting its global DRAM market share to rise from about 10 percent at present to 18 percent by the end of 2028. CXMT's annual output growth is estimated at between 40 and 45 percent as AI will drive a seven-fold surge in global memory demand by 2030.

Lu Zhe, chief economist at Soochow Securities, said that A-share investors' appetite for tech companies may pick up after CXMT's IPO. Combined with the fact that a growing number of companies have recently announced their buyback plans, investors should adopt a more optimistic outlook on the A-share market. Though market volatility may be unavoidable, the odds of a market rebound are steadily rising, he said.

In a separate development, Fang Xinghai, former vice-chairman of the China Securities Regulatory Commission, is under investigation for suspected serious violations of Party discipline and the law, China's top anti-graft authorities said on Friday.

Experts broadly read the move as a signal that the financial anti-corruption drive is entering a deeper phase, aimed at protecting the country's financial assets while upholding market integrity and stability.

Lian Ping, chairman of the China Chief Economist Forum, said that a new long-term stabilizing mechanism is taking shape in the Chinese capital market, featuring broader participation, early capital entry, institutional fine-tuning and long-term confidence stabilization.

The A-share market has entered a structural bull run with the optimizing of the market governance mechanism. With more supportive policies and capital anticipated, investors should have faith in the A-share market, as the valuation of technology companies will return to a reasonable level, said Lian.

"New quality productive forces and technological innovation, which play pivotal roles in China's economic restructuring, need the empowerment of equity financing. This is the fundamental reason underpinning the sustained upward trajectory of the A-share market over the long run," he said.