Summary of Key Points
On the first day of its listing, Changxin Technology (the only A-share company with a complete production chain capable of mass-producing DRAM memory chips) witnessed an extraordinary scene: trading volume exceeded 120 billion yuan in just half a day (setting a new record for individual A-share stocks), with the stock price soaring by 531% and its market value reaching 3.65 trillion yuan (surpassing that of Industrial and Commercial Bank of China, Tencent, and Intel). This surge reflects the market's collective enthusiasm for the scarcity of domestically produced DRAM. Only four companies in the world can manufacture DRAM, and none of the top three are listed on the A-share market. Coupled with the current global DRAM price boom and a supply shortage, investors have seen Changxin as the sole investment opportunity for China's ambition to achieve DRAM self-sufficiency. However, beneath the celebrations lie underlying concerns regarding technological gaps, industry cycles, and potential supply disruptions.
I. The First Day of Listing: A Massive Buying Boom
The numbers from Changxin's listing day were simply astonishing:
- Trading Volume of 122.1 Billion Yuan: In just 34 minutes after the market opened, it surpassed the previous A-share daily record (set by Dongfang Fortune at 90 billion yuan), indicating that over 120 billion yuan flowed into the market to buy shares.
- Market Value of 3.65 Trillion Yuan: The highest in A-share history, surpassing even the Industrial and Commercial Bank of China and ranking among the top 25 globally (outperforming Intel and Tencent). A company founded just ten years ago in Hefei has suddenly become a global technology giant.
- Almost No Abandoned Orders: The winning bid rate was 0.47% (with 9.42 million applicants), and the abandonment rate was only 0.17%, meaning almost all successful bidders paid for their shares. Given that the minimum account requirement for the STAR Market is 500,000 yuan, these investors likely have considerable financial resources and were eager to participate, much like people competing for concert tickets.
- Profit of 20,000 Yuan per Share: With an issue price of 8.66 yuan and a closing price of 54.65 yuan at noon, each share bought (500 shares) resulted in a profit of over 20,000 yuan—a tempting offer for individual investors.
These figures collectively suggest that everyone wanted to be part of China's first step towards DRAM self-sufficiency.
II. Why Such a Wild Price Rise? The Combination of Scarcity and Cyclical Benefits
Changxin's 531% increase is not accidental:
- The Only Option for DRAM Production: Among the more than 4,000 A-share companies, only Changxin can produce DRAM, which is essential for computers and smartphones. SMIC focuses on chip manufacturing (not memory production), and GigaDevice Technology specializes in another type of memory (NOR Flash). Only four companies globally—Samsung, SK Hynix, Micron, and Changxin—can mass-produce DRAM, with the first three not being listed on the A-share market. If you want to invest in Chinese-made DRAM, Changxin is your only choice.
- Global DRAM Price Surge: Samsung and SK Hynix have shifted 70%-80% of their production capacity to HBM (high-end memory required for AI), significantly reducing the supply of standard DRAM. DRAM contract prices rose by 90% in the first quarter of 2026 and another 58%-63% in the second quarter, creating a favorable market environment for Changxin's business. Its clients include Alibaba, Tencent, and ByteDance (which signed a five-year contract worth $7 billion), leading to substantial profits—Changxin reported a loss of 16.3 billion yuan in 2023 but a profit of 24.7 billion yuan in the first quarter of 2026, quickly offsetting its previous losses.
In short, investors have no other choice but Changxin due to the current DRAM price boom.
III. A Market Value of 3.65 Trillion Yuan: More Than Just Profit
Is a market value of 3.65 trillion yuan justified based on profits?
- Profit Perspective: The valuation is extremely high. Changxin's expected profit for the first half of 2026 is 50-57 billion yuan (annualized to 105 billion yuan), resulting in a PE ratio of about 35 times. In contrast, Micron and SK Hynix have PE ratios of around 7.5-8 times, making Changxin's valuation four and a half times higher.
- Real Pricing Logic: The market is betting on the possibility that China can become self-sufficient in DRAM production. Similar to NVIDIA’s rise due to the demand for GPUs in AI, Changxin’s value reflects expectations of China meeting its own memory needs. However, the difference lies in the context: NVIDIA’s growth is based on a proven technology, while Changxin’s value reflects a sense of urgency (to avoid being dependent on foreign suppliers).
In essence, investors are buying into the belief that China can overcome its reliance on foreign DRAM.
IV. Historical Comparisons: Similar to PetroChina or SMIC?
Changxin’s success reminds people of past market frenzies:
- Similar to PetroChina in 2007: When PetroChina went public, it was seen as a symbol of national energy sovereignty, with its market value briefly ranking first globally. However, its stock price fell by 19% and has not yet returned to its initial level. Like Changxin, it represents a national strategic asset, attracting widespread attention (with 9.42 million applicants) and achieving a huge market value.
- Differences from PetroChina: PetroChina was already at the peak of its performance when it listed (net profit of 134.5 billion yuan in 2007), while Changxin is still growing, with plans to expand production capacity and increase market share.
- Similar to SMIC in 2020: SMIC’s initial stock price surge was driven by hopes for chip self-sufficiency, but its valuation later fell due to poor performance. If Changxin’s future performance fails to meet expectations, its valuation could also decline.
In summary, while Changxin has growth potential, it faces the risk of a market correction once the initial excitement fades.
V. Underlying Concerns: Three Critical Challenges
Despite the excitement, Changxin’s risks are clear:
- Technological Gap: Changxin uses 16-17nm manufacturing processes, while Samsung is already working on HBM4 (high-end AI memory). Changxin’s HBM3 technology is still in the validation phase, lagging by two to three generations. It may struggle to enter the high-end server memory market (used by companies like NVIDIA).
- Industry Cycles: The DRAM industry experiences significant price fluctuations every three years. Current prices are at historical highs, and Changxin itself has warned that the surge is unlikely to sustain. A similar pattern occurred in 2016-2018, with a subsequent price crash after Samsung increased production capacity.
- Supply Recovery: The shift in production from DRAM to HBM by Samsung and SK Hynix is strategic, not a permanent shift. If demand for HBM slows down, these companies could return to producing DRAM, potentially ending Changxin’s temporary advantage.
Another factor is the current lack of investment opportunities (weak real estate markets, risks associated with US dollar assets, and low bond yields), making Changxin an attractive target in a capital-scarce environment. However, such speculative pricing can quickly reflect five years of industry trends, leading to either reality catching up with expectations or valuations falling.
Conclusion
The frenzy surrounding Changxin’s listing reflects the market's desire for China to achieve self-sufficiency in critical technologies like DRAM. While its market value may fluctuate, the emphasis on breaking through such technological bottlenecks is a more significant milestone. A country’s strength lies in its foundational capabilities, not in short-term stock price spikes.