Shares of Chinese AI Chip Maker Cambricon Surge 300% on IPO Day in Shanghai

Technology Author: Dixuan Lu, Ivan Platonov Editor: Luke Sheehan Jul 20, 2020 09:35 AM (GMT+8)

Its Star Market debut was among the most anticipated this year.

Image credit: Cambricon's official website

On July 20, Cambricon (688256:SH), which makes AI accelerators for data centers and edge devices, started trading its newly-listed stock on the Shanghai Stock Exchange’s Star Market, the bourse’s one-year-old technology board. In the first minutes of public transactions, the share price soared by 300%, reaching CNY 258 and driving the company’s total market capitalization to CNY 103 billion, or approximately USD 14.73 billion.

Read more about why we are bearish overall about Cambricon’s stock.

Headquartered in Beijing, Cambricon is among China’s largest hardware developers designing integrated circuits to enable machine intelligence. 

Check out our overview of the chipmaker’s product mix.

Founded in 2016, it was valued at USD 2.5 billion two years later. 

There are piles of private capital behind the company’s growth: it was backed by state-affiliated entity SDIC Venture Capital, the country’s biggest investment organization, China International Capital Corporation (CICC), the venture capital arms of Lenovo (00992:HKEX) and electronics producer TCL (000100:SZ), as well as the Chinese Academy of Sciences, alma mater of Cambricon’s founder Chen Tianshi, to name a few.

In March 2020, the chipmaker filed a prospectus with China’s market regulator, which approved the listing in June. The company then priced its public offering at CNY 64.39 apiece, planning to issue around 40 million shares, around one-tenth of the total. 

Owning 33.19% of the firm, Mr. Chen has entered the club of Chinese billionaires thanks to this IPO.