Shanghai Enflame Shares Surge 234 Percent on IPO Debut Amid AI Chip Demand
Tencent-backed Shanghai Enflame Technology raised $912 million while its stock price jumped to roughly three times its offer price during the initial trading session.
Chinese artificial intelligence chipmaker Shanghai Enflame Technology traded significantly higher on Friday after listing in China's STAR Market. Investors drove the price up about 234 percent from the IPO level, with shares opening at 410 yuan compared to an offering price of 142.18 yuan. The company raised 6.12 billion yuan, equivalent to US$912 million, in its initial public offering. During the trading session, the stock climbed as high as 475 yuan before settling near 430 yuan by late afternoon.
Enflame remains unprofitable since starting operations in 2018 and relies on Tencent, which holds a 17.95 percent stake after the sale. CEO Zhao Lidong's personal net worth is estimated at US$2.5 billion due to the rise, subject to lock-up restrictions until specific targets are met. The debut added to a trend of Chinese firms seeking domestic alternatives to US chip suppliers.
