CXMT IPO Attracts Investors with Promising Allotment Rate Amid AI Boom

The 60-year-old stock investor from southwestern Sichuan province was encouraged by her securities account manager, who told her that CXMT’s unusually large share sale could produce a higher allotment rate than most Chinese mainland IPOs. This represents a 1.4 per cent yield on the original price of 8.66 yuan per share, as both professional and amateur stock investors bet on the country’s memory chip champion amid the artificial intelligence boom. CXMT is issuing about 6.69 billion shares, expecting to raise gross proceeds of 57.9 billion yuan (US$8.56 billion). If the 15 per cent overallotment option is fully exercised, proceeds could rise to 66.6 billion yuan. Some brokerage valuation scenarios have put the company’s market cap at as much as 3 trillion yuan after listing, which means that the gain would be about 36 yuan per share, or more than fourfold. “For A-share IPOs in China, winning an allocation [usually] means making money,” said Kevin Chen, a 35-year-old employee at a state-owned enterprise in Shanghai, who also subscribed for shares.