CHINA will have another major chip debut on Wednesday (Dec 17), eagerly watched by stock-market investors after the stellar gains by its peer Moore Threads Technology earlier this month.
MetaX Integrated Circuits Shanghai is set to start trading in its home city 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 (AI) 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 were not lucky enough to get an allotment in the notoriously tough IPO lottery.
Moore Threads jumped more than six-fold 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, whose most advanced chips are blocked by the US from being sold to China.
Priced at 104.66 yuan a share in its IPO, MetaX will debut with a market capitalisation of 41.8 billion yuan (S$7.7 billion), well below Moore Threads’ current 341 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 and Advanced Micro Devices (AMD), 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 to 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.”
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 company claimed as comparable to Nvidia’s A100, accounted for nearly 98 per cent of total revenue. The newer C588 generation has significantly narrowed the performance gap with Nvidia’s H100, MetaX says.
MetaX captured about 1 per cent of China’s AI chip market last year, the company said in its prospectus, citing data from an industry consultancy.
Chinese IPOs have been strong this year, averaging a 250 per cent 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 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 and Yangtze Memory Technologies. 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, Tencent Holdings and others, are aiming to complete their IPOs as soon as January. BLOOMBERG
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