(Dec 17): China saw another spectacular debut by chipmaker MetaX Integrated Circuits Shanghai Co on Wednesday, coming on the heels of stellar gains by its peer Moore Threads Technology Co earlier this month.
MetaX jumped as much as 569% in its home city in its trading debut, after raising US$585.8 million in an initial public offering (IPO) that was 2,986 times oversubscribed on the retail portion. It drew even higher demand than Moore Threads, whose shares were oversubscribed by 2,750 times in its IPO.
Like Moore Threads, MetaX makes graphics processing units for artificial intelligence developers — a red-hot industry that’s growing at a rapid clip as consumers and businesses adopt AI services. The stock is set to draw investors who weren’t lucky enough to get an allotment in the notoriously tough IPO lottery.
Moore Threads jumped more than sixfold over eight sessions since its debut, with the stock quintupling on the first trading day alone. Investors are betting on national champions that could emerge as viable local competitors to global leader Nvidia Corp., whose most advanced chips are blocked by the US from being sold to China.
Priced at 104.66 yuan a share in its IPO, the jump took its market capitalisation to 280 billion yuan, which compares with Moore Threads’ current 337 billion yuan valuation. MetaX’s price-to-sales ratio stands at 56.4, compared with an average of 127.4 for peers such as Cambricon Technologies Corp and Advanced Micro Devices Inc, according to the company’s exchange filing.
“If we use Moore and Cambricon’s market caps as a yardstick, then MetaX might have a 10-12 times upside potential,” said Xu Dawei, a fund manager at Jintong Private Fund Management in Beijing. “MetaX’s listing may potentially spearhead a rally in tech stocks and create more excitement around new and secondary listings.”
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MetaX can trace its roots to AMD, with three key members of its founding team having previously worked for the US chipmaker. Those include chairman and chief executive officer Chen Weiliang.
The Chinese company designs and sells GPUs that are used for AI workloads as well as graphics rendering in gaming and other visualisation applications. In 2024, its AI-focused Xiyun C500 series, which the company claimed was comparable to Nvidia’s A100, accounted for nearly 98% of total revenue. The newer C588 generation has significantly narrowed the performance gap with Nvidia’s H100, MetaX says.
MetaX captured about 1% of China’s AI chip market last year, the company said in its prospectus, citing data from an industry consultancy.
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Chinese IPOs have been strong this year, averaging a 250% pop on the first trading day, according to data compiled by Bloomberg. That has partially been due to Chinese authorities keeping a lid on issuances to prevent sapping liquidity in the broader market.
Meanwhile, softer risk appetite in the secondary market and year-end profit-taking have also boosted interest in new offerings, which are viewed as a reliable way to capture gains in the first few days of trading. Radio frequency chipmaker Beijing Onmicro Electronics Co more than doubled on its debut on Tuesday, following an IPO that was 2,899 times oversubscribed.
Among other chipmakers to potentially list in China are ChangXin Memory Technologies Inc and Yangtze Memory Technologies Co. The two firms may each seek a valuation of 200 billion yuan to 300 billion yuan.
In Hong Kong, a flurry of companies in the AI space is also lining up for market debuts. MiniMax and Zhipu, both backed by Alibaba Group Holding Ltd, Tencent Holdings Ltd and others, are aiming to complete their IPOs as soon as January.
Uploaded by Liza Shireen Koshy
