China’s Most Valuable Stock CXMT Draws Split Views: ‘Tech Gap’ or Memory Champion

CXMT Chases Samsung, SK Hynix as Investors Debate Whether It Is a Next-Generation Force or a Bubble

Nomura Sees 18% DRAM Share; Morningstar Says Lack of EUV Leaves It Overvalued

Investors are split on ChangXin Memory Technologies Inc., or CXMT, China’s largest DRAM maker, after its July 27 debut on Shanghai’s Star Market, the tech board often dubbed China’s Nasdaq. Nomura cited a global memory shortage and rising artificial-intelligence demand as reasons the company can gain DRAM market share. Morningstar took the opposite view, arguing that the lack of extreme ultraviolet lithography tools leaves a clear technology gap.

CXMT Becomes Mainland China’s Most Valuable Listed Company

Bloomberg reported that CXMT surged as much as 535% from its 8.66 yuan offer price to 55.03 yuan shortly after trading began, briefly becoming the most valuable listed company in mainland China. The company’s July 14 book-building drew 11,537 investor accounts and was 462.85 times oversubscribed. Its offer price was about double the market estimate of 4.4 yuan.

CXMT raised 57.9 billion yuan, or about $8.1 billion, by issuing 6.688 billion new shares at 8.66 yuan each in the IPO. Including an overallotment option, the deal could expand to 7.69 billion new shares and 66.61 billion yuan, or about $9.3 billion.

The listing was the biggest IPO in Asia this year and the largest ever by a Chinese semiconductor company, topping Semiconductor Manufacturing International Corp.’s $7.5 billion deal in 2020. It was also the second-largest IPO on mainland Chinese exchanges since Agricultural Bank of China’s $10 billion listing in 2010.

CXMT’s customers include Lenovo Group Ltd., Huawei Technologies Co. and Alibaba Group Holding Ltd. U.S. sanctions have effectively forced Chinese companies to adopt more CXMT memory. With DRAM prices soaring, Apple Inc. is also considering using CXMT memory in products including the iPhone and iPad to cut component costs, according to the report.

South Korean investors are watching high-bandwidth memory most closely. CXMT has drawn the attention of global technology companies as it pushes into the HBM market dominated by Samsung Electronics Co. and SK Hynix Inc. Industry sources project CXMT will devote 20% of its DRAM wafer capacity this year to HBM3, the fourth generation of high-bandwidth memory. The technology gap with South Korean rivals was estimated at about four years through the pre-HBM3 generation. In HBM3, industry participants view that gap as having narrowed to less than three years.

A packaging plant under construction in Shanghai is also aimed at HBM mass production, according to industry accounts. CXMT has said it began supplying HBM3 samples in the second half of 2025 to Chinese AI chip designers including Huawei, and is targeting mass production of HBM3E by 2027. Early yields and reliability could prove challenging. Even so, as with DDR4 before it, the effort itself is widely viewed as a competitive threat.

Will the DRAM Market Be Disrupted? Analysts Are Divided

CXMT’s technology narrative helped turn its IPO into a blockbuster, but analysts remain far apart on valuation.

Donnie Teng of Nomura rates CXMT a buy and set a target price of 116 yuan, or 1,239% above the IPO price. He said the target is based on applying a 20 times price-to-earnings multiple to his fiscal 2028 earnings-per-share forecast.

Teng also wrote that CXMT could trade at about twice Micron Technology Inc.’s valuation multiple. He expects the company to gain market share faster because global memory supply will remain tight for some time.

He projects global memory consumption will rise more than sevenfold by 2030 as AI agents drive demand. On that basis, CXMT’s memory shipments would increase 40% to 45% annually through 2030, while its global DRAM market share would expand from about 10% now to 18% by the end of 2028.

Morningstar analyst Wu Jingjie offered a much more cautious view. He set fair value at 14.90 yuan a share, 72.1% above the IPO price but still far below the current trading level. In his view, CXMT’s failure to secure EUV lithography equipment will make it difficult to close the technology gap, and the resulting valuation discount will persist for now.

“Given CXMT’s weaker technology, it will likely lead to lower DRAM pricing than peers among pure-play memory companies, and its valuation multiple will clearly remain at a lower level,” Wu said. Bloomberg said the divergence highlights sharply different views of CXMT’s growth prospects even as it emerges as a potential threat to Samsung Electronics, SK Hynix and Micron.

Even so, longer-term optimism remains dominant among some market participants. They expect steady buying to support the stock even if sentiment across the broader semiconductor sector worsens.

Zeng Zhiqing, a fund manager at Beijing Nuohua Investment Management, told Bloomberg that unlike earlier large IPOs, CXMT has not yet reached its limits in either technology or market share. That leaves substantial room for growth, he said.

Theodore Xue, chief executive officer of EE Capital, told CNBC that he has little doubt CXMT will develop into a global leader. In memory chips, the company is more than a latecomer and can establish itself as a global champion over time, he said.

Kang Kyung-ju, Hankyung.com reporter qurasoha@hankyung.com