MetaX debut set to ignite Chinese AI chip rally

China is set for another major chip debut on Wednesday, drawing keen attention from investors following Moore Threads Technology Co.’s recent surge. 

MetaX Integrated Circuits Shanghai Co. will commence trading in its home city after raising $585.8 million in an initial public offering that was 2,986 times oversubscribed on the retail portion. It attracted even higher demand than Moore Threads, whose shares were oversubscribed by 2,750 times in its IPO.

MetaX’s listing follows an incredibly strong investor response, reflecting surging enthusiasm for domestic players in the global race for artificial intelligence computing power.

AI Chip market heats up as MetaX targets Nvidia rivals

MetaX manufactures graphics processing units for artificial intelligence developers similar to Moore Threads. The trend is a growing industry and expanding at a rapid clip as consumers and businesses adopt AI services. The stock is expected to attract investors who weren’t lucky enough to get an allotment in the notoriously tough IPO lottery.

Moore Threads climbed more than 500% in eight trading sessions since its debut, with the stock rising five times in just its opening day of trading. Investors are betting on national champions who could seem like legitimate local rivals to global leader Nvidia Corp., whose most cutting-edge chips are blocked by the US from being sold to China. 

Worth 104.66 yuan per share at its IPO, MetaX will open at a market capitalization of 41.8 billion yuan ($6 billion), significantly below Moore Threads’ current valuation of 341 billion yuan. MetaX’s price-to-sales ratio stands at 56.4, compared with an average of 127.4 for peer companies like 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.”

Chinese tech listings draw investors amid record oversubscriptions

MetaX’s roots can be found at AMD, with three of its founding members having previously worked for the US chipmaker. Chairman and Chief Executive Officer Chen Weiliang is one of those. 

A Chinese company that designs and sells GPUs for AI workloads and graphics rendering in gaming and other visualization applications. Its AI-focused Xiyun C500 series, which the company claimed was comparable to Nvidia’s A100, made up almost 98% of total revenue in 2024. 

The new generation, called C588, has significantly narrowed the performance gap with Nvidia’s H100, according to MetaX. Last year, MetaX captured approximately 1% of China’s AI chip market, according to the company’s prospectus, which cites data from an industry consultancy.

Chinese IPOs have been robust this year, with an average first-day trading jump of 250%, according to Bloomberg data. That has at least partly been because Chinese officials have been quelling issuances to prevent sapping liquidity in the broader market. 

At the same time, a softer risk appetite in the secondary market and year-end profit-taking have also increased interest in new offerings, which are seen as a reliable opportunity 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, after filing in a 2,899-times oversubscribed IPO. 

Changxin Memory Technologies Inc. and Yangtze Memory Technologies Co. are among chipmakers that could consider listing in China. They could each seek a valuation of 200 billion yuan to 300 billion yuan. 

In Hong Kong, too, a swarm of companies in the AI space is gearing up for market debuts. MiniMax and Zhipu, backed by Alibaba Group Holding Ltd., Tencent Holdings Ltd., and others, aim to complete their IPOs as soon as January.

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