China's new GPU startup "Four Little Dragons" fell into losses after going public, and its profitability was questioned

Suiyuan Technology, China’s fourth GPU (graphics processing unit) startup, was listed on the Hong Kong Stock Exchange on the 11th.

China has vigorously supported the "Four Little Dragons" of GPU (graphics processor) companies such as Suiyuan Technology, Moore Thread, Muxi Technology and Biren Technology to compete with the US GPU manufacturer Nvidia. However, the Wall Street Journal reported that these four companies have not achieved sustainable profits so far, and the real test has yet to come.

Suiyuan Technology was listed on the Shanghai Science and Technology Innovation Board on September 11, and its share price soared 179.2% on the first day of listing. However, like Moore Thread, Muxi Technology and Biren Technology, which have been listed on the Shanghai Science and Technology Innovation Board and the Hong Kong Stock Exchange since December last year, such a rise may only be short-lived.

These four companies are known as the "Four Little Dragons" of China's GPU industry. They represent part of China's efforts to get rid of its dependence on foreign technology and cultivate local "Huida". However, these four companies have not yet achieved sustainable profits, making investors skeptical of their prospects.

The United States has implemented export control measures on semiconductor technology and equipment, forcing the Chinese government to promote domestic technology companies to use domestic substitutes, which has boosted the revenue of the four companies, but high R&D costs have caused the four companies to suffer losses for many years.

Taking Moore Threads as an example, including the first half of this year, the company has been in a state of loss for four and a half consecutive years. After Moore Thread ushered in the first large-scale sale of restricted stocks on September 7, investors sold the stock aggressively, causing its stock price to plummet by more than 30% last week. Since its listing on December 5 last year, the stock price has plummeted 40.4%.

Muxi Shares is also facing the same dilemma. The company has also suffered losses for four consecutive years from 2022 to 2025. Although it turned a profit in the first half of this year, it was mainly due to what the company said was an unsustainable gain from changes in fair value. After investors saw the plummeting share price of Moore Thread, they also followed up and sold Muxi shares, causing its share price to fall by more than 25% last week. The share price has also fallen by 41.1% since its listing on December 17 last year.

Suiyuan Technology, which has just been listed, has suffered cumulative losses of more than 4.4 billion yuan (NT$20.75 billion) since 2018.

Analysts say that smaller companies in China's AI chip industry must produce more results to narrow the performance gap with local players, which means they still have a longer way to go to catch up with Western companies.