Tencent-backed Enflame nearly triples in Shanghai debut on AI chip demand bets

HONG KONG/SHANGHAI, Sept 11 — Chinese artificial intelligence chipmaker Shanghai Enflame Technology closed up 179% in its Shanghai ​debut on Friday, after the Tencent-backed company raised 6.12 billion yuan ($912 million) in its initial public offering.

Enflame's debut adds to a rush of listings by Chinese companies seeking to supply computing ‌chips for artificial intelligence, as Beijing pushes for home-grown alternatives to U.S. suppliers such as Nvidia.

The stock opened at 410 yuan, well above its ⁠offer price of 142.18 yuan, hit a high ​of 475 yuan and a low of 386.99 yuan, ⁠before closing at 397 yuan. China's STAR 50 Index fell 1%, while the CSI 300 Index dropped 0.84%.

"The ‌performance of new shares in ‌the same concept sector is significantly better than that of already listed stocks, indicating that ⁠capital is rotating within the sector," said Shen Meng, director at ⁠Beijing-based boutique investment bank Chanson & Co.

"The rise is driven by short-term incentives for new share subscriptions rather than investors' focus on the long-term fundamental development of the sector," he added. "Funds pursue gains from new‑share subscriptions instead of betting on corporate potential."

Enflame is one of a group of Chinese AI chip startups sometimes called the "four little GPU dragons", alongside Moore Threads, MetaX and Biren Technology.

Enflame sold 43.04 million ‌new shares, equal to 10% of its enlarged share capital, on Shanghai's ​tech-focused STAR Market.

Its offer price gave it a market value of about 61.2 billion yuan, according to its filing on Wednesday.

At its closing price of 397 yuan on Friday, Enflame's market value had jumped to roughly 171 billion yuan, nearly 2.8 times the valuation at the IPO price.

Tencent is Enflame's largest shareholder, with a 17.95% stake after the offering, and was also the company's largest customer before the listing.

Sales linked to Tencent accounted for 83.79% of Enflame's 2025 revenue, its prospectus showed.

Enflame has yet to ​turn a profit. Its net loss narrowed to 1.16 billion yuan in 2025 from 1.51 billion yuan a year earlier, while ‌revenue rose 37% ‌to 990.2 million ⁠yuan, the prospectus showed.

The company forecast revenue of 2.3 billion yuan to 3 billion yuan for the first nine months of 2026, alongside a net loss of 700 million yuan to 860 million yuan.

It expects to break even or become profitable in 2026 or 2027, depending on revenue growth and margins, the filing showed.

The company plans ‌to use most of the ​IPO proceeds to develop its fifth- and sixth-generation AI chips, ‌related software and large scale computing ⁠systems, according to ​its prospectus.

($1 = 6.7061 Chinese yuan)

(Reporting by Yantoultra Ngui in Hong Kong and Samuel Shen in Shanghai; Editing by Jacqueline Wong ​and Kim Coghill)

Related topics