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CXMT IPO Sees Overwhelming Investor Demand, Triggering Clawback

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Investors showed overwhelming demand for China's CXMT IPO, a leading DRAM producer, submitting applications for nearly 817 billion shares.
The high interest triggered a clawback mechanism, shifting shares to retail investors, highlighting appetite for domestic chip alternatives.
Winning lottery numbers for allocations are due Monday.

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Investors submitted valid applications for nearly 817 billion shares for CXMT's Shanghai listing, highlighting intense appetite for China’s leading producer of dynamic random-access memory (DRAM). This demand reflects investor interest in Beijing’s effort to build domestic alternatives to foreign chip suppliers.

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Investors submitted valid applications for nearly 817 billion shares on Thursday, according to an official announcement published Thursday night. The response highlights the intense appetite for China’s leading producer of dynamic random-access memory, or DRAM, as investors seek exposure to Beijing’s effort to build domestic alternatives to foreign chip suppliers.

The overwhelming demand for the Shanghai listing triggered a clawback mechanism that shifted about 502 million shares from the institutional tranche to retail investors. Even after the online offering was expanded to about 3.85 billion shares, the final allotment rate was only 0.47 per cent.

China’s online IPO system does not require investors to provide cash when submitting applications. Instead, applicants receive lottery entries based on the value of their existing Shanghai-listed shareholdings; they pay only if they win allocations. Each successful entry for CXMT entitles an investor to buy 500 shares for 4,330 yuan (US$637).

The winning lottery numbers will be announced on Monday.

Professional investors also showed strong interest. Valid preliminary bids from 285 institutional investors and their funds covered about 1.24 trillion shares, equivalent to nearly 463 times the initial offline tranche. Among them, 153 private fund products managed by High-Flyer Quant, the hedge fund co-founded by DeepSeek founder Liang Wenfeng, submitted bids at 8.78 yuan per share for a combined 12.55 billion shares.