Economic Observer reporter Zheng Chenye

On July 27th, Changxin Technology (688825. SH), a leading domestic DRAM storage chip, officially landed on the Science and Technology Innovation Board, and the market information can be described as "highly anticipated".

On the same day, Changxin Technology opened at 49.50 yuan/share, an increase of 471.59% from the issue price of 8.66 yuan/share, with a total market value of 3.31 trillion yuan; The closing price was 49.00 yuan/share, with a closing increase of 465.82%, and the total market value was fixed at 3.28 trillion yuan; The intraday low price was 38.11 yuan/share, and the intraday high price was 55.03 yuan/share, with a stock price fluctuation of 195.38%; The transaction amount on that day was as high as 141.187 billion yuan, and the turnover rate was also as high as 66.40%!

Thus, Changxin Technology has surpassed Industrial and Commercial Bank of China (601398. SH) to become the company with the highest total market value in the A-share market. At the same time, it also surpassed Oriental Fortune (300059. SZ) in one fell swoop, becoming the company with the largest daily trading volume in A-share history.

Moreover, during the morning trading session, Changxin Technology's total market value even surpassed Tencent Holdings (00700. HK) at one point, topping the list of "China's Most Valuable Company". However, based on the closing price, Tencent Holdings' closing market value was HKD 4028 billion (RMB 3475.8 billion), still higher than Changxin Technology.

One day floating profit

In fact, before the official listing, there were significant differences among investors regarding the first day trend of Changxin Technology's stock price, and even many investors were worried about a "breakout".

One of the backgrounds is that global storage stocks have experienced a sharp decline since July, and the A-share storage sector has also experienced a deep pullback. This divergence is also reflected in the pricing process - according to the inquiry details publicly disclosed by Changxin Technology, the lowest subscription price for offline institutions was 7.26 yuan/share, while the highest was reported at 65.19 yuan/share.

Reflected in the market, on the first day of listing, Changxin Technology's stock price fluctuated quite "violently" - after opening at 49.5 yuan, it immediately experienced a rapid decline, with the lowest falling to 38.11 yuan; Subsequently, it continued to rise and surged above 55 yuan, with an increase of over 535% at one point; In the afternoon, it fluctuated downwards and eventually closed at 49 yuan.

On that day, Changxin Technology surpassed the transaction volume of 90.038 billion yuan set by Oriental Wealth on October 9, 2024, with a transaction volume of 141.187 billion yuan, becoming the first individual stock in A-share history to exceed 100 billion yuan in daily transaction volume.

Changxin Technology's massive trading volume has also put great pressure on the trading system. Shortly after the opening, several securities firms experienced situations where investor orders could not be confirmed and cancellations failed, and then gradually resumed operations. In response, a representative from a large brokerage firm in southern China explained to reporters that the problem is not with the brokerage system, but rather with the declaration volume far exceeding the processing capacity of the exchange host to receive at a fixed flow rate.

Before Changxin Technology officially went public, many market institutions made various predictions about its impact, fearing that this giant would significantly divert market funds. However, based on the performance of the stock market on the first day, market concerns did not arise - as of the close on the 27th, the Shanghai Composite Index rose 1.15%, the Shenzhen Component Index rose 2.72%, the ChiNext Index rose 3.16%, and the Shanghai and Shenzhen stock markets traded 2.08 trillion yuan throughout the day, with a surge of 145.5 billion yuan compared to the previous trading day, and nearly 5200 individual stocks rose.

According to the closing price of Changxin Technology on the first day of trading, among the online new investors, one signed 500 shares, with a floating profit of about 20200 yuan on paper. The previously released announcement on the success rate showed that 9.4288 million investors participated in Changxin Technology's online subscription, with a success rate of about 0.47% and a abandonment rate of about 0.17%.

The employees who hold shares within Changxin Technology have gained greater rewards than newcomers.

According to the prospectus, Changxin Technology implemented two employee stock ownership plans before going public, covering a total of 6760 people. The grant price for the second phase was 0.108 yuan per share, with an increase of approximately 453 times based on the closing price. According to statistics from Oriental Wealth, the employees covered by the two shareholding plans account for approximately 35% of the total number of employees at Changxin Technology. Hefei Jixin, an employee stock ownership platform, directly holds 5.037 billion shares of Changxin Technology, with a corresponding market value of approximately 246.8 billion yuan at the closing price.

According to the prospectus information, Zhu Yiming, Chairman of Changxin Technology, has been granted 1.536 billion shares. This portion of stocks corresponds to approximately 75.3 billion yuan at the closing price, of which half has been promised to be distributed to current employees within 10 years after being listed for 36 months. In addition, 14 directors, senior management personnel, core technical personnel, and their close relatives of Changxin Technology hold a total of 2.034 billion shares, with an issue price of approximately 17.6 billion yuan and a first day closing price of approximately 99.7 billion yuan.

Among external shareholders, the book returns of state-owned assets and industrial capital rank among the top.

According to statistics from Oriental Wealth, Hefei State owned Assets invested 14.4 billion yuan in the first phase of Changxin Technology project and continued to increase its holdings thereafter, holding a total of about 30% to 40% of the shares. Calculated based on a market value of about 3 trillion yuan, the book value is about 1.1 trillion yuan, ranking first among all parties; The second phase of the large fund invested 4.76 billion yuan in 2021 and continued to increase its holdings, holding 8.73% of the shares before issuance, with a book value of approximately 260 billion yuan under the same caliber.

In addition, Alibaba holds nearly 5% of the shares, making it the industry investor with the highest shareholding ratio, with a book value exceeding 150 billion yuan. In June 2025, Alibaba Cloud invested 6.1 billion yuan to subscribe for 3.85% of Changxin Technology's newly added registered capital. This is the last round of financing before Changxin Technology goes public. Based on the closing market value on the first day, the book value of this investment has exceeded 100 billion yuan.

Securities firms' follow-up investment is also a big winner. China International Capital Corporation (601995. SH) and China CITIC Securities (601066. SH), as sponsoring institutions and lead underwriters, have each invested approximately 115 million shares in their subsidiaries with a lock up period of 24 months. Based on the closing price, the market value of the two securities firms' co investment holdings is approximately 5.6 billion yuan each, with a floating profit of approximately 4.6 billion yuan each.

In addition, Zhang Kaifeng, an analyst at Orient Securities, calculated in a research report released at the end of May that after penetration, China Merchants Securities (600999. SH) will hold approximately 0.752% of Changxin Technology's shares, the highest among listed securities firms. Based on the closing market value on the first day, these stocks correspond to approximately 24.7 billion yuan.

It is worth noting that during the initial listing of Changxin Technology, there were approximately 4.503 billion shares of unlimited tradable shares, accounting for 6.73% of the total share capital after issuance. The turnover rate of over 66% on the first day occurred among these chips. Among the remaining shares, 70% of offline placements are locked in for 6 months, strategic placements are locked in for 12 to 36 months, and sponsor follow-up placements are locked in for 24 months.

Benchmarking International

Changxin Technology is currently the only IDM (Integrated Design and Manufacturing) enterprise in China that has achieved large-scale production of general-purpose DRAM.

According to Omdia, a well-known consulting firm, in the fourth quarter of 2025, Changxin Technology's share of global DRAM sales was 7.67%, ranking fourth in the world and first in China. Samsung Electronics, SK Hynix, and Micron Technology, which rank ahead of it, have a combined market share of over 90%. When institutions price Changxin Technology, they generally use these three companies as benchmarks.

Nomura analyst Donnie Teng gave Changxin Technology a "buy" rating in her first coverage report released on July 27th, with a target price of 116 yuan, corresponding to a 2028 expected P/E ratio of 20 times and a total market value of approximately 7.76 trillion yuan. He believes in the report that the tight global memory supply is unlikely to ease in the coming years, and Changxin Technology's market share growth will accelerate.

From the actual issuance pricing, Changxin Technology's issuance price of 8.66 yuan corresponds to a dynamic P/E ratio of approximately 5 times. According to market institutions' calculations based on the closing price on July 13th, the P/E ratios of Samsung Electronics, SK Hynix, and Micron Technology based on their 2026 profit forecasts are approximately 5.02 times, 5.64 times, and 8.2 times, respectively. Changxin Technology's issuance pricing is in the same range as the three major original manufacturers.

But the first day of trading widened the valuation gap. According to the annualized performance forecast of Changxin Technology in the first half of the year, its net profit attributable to the parent company will be between 100 billion yuan and 114 billion yuan in 2026. The closing market value of 3.28 trillion yuan corresponds to a dynamic P/E ratio of about 29 to 33 times, while the three major original factories are still between 5 and 8 times.

A-share investors are willing to offer Changxin Technology a higher premium, perhaps due to considerations of "performance growth rate" and "substitution space".

According to the prospectus, in the first quarter of 2026, Changxin Technology achieved a revenue of 50.8 billion yuan, a year-on-year increase of 719.13%, and a net profit attributable to the parent company of 24.762 billion yuan, a year-on-year increase of 1688.30%. Changxin Technology expects to achieve a revenue of 110 billion to 120 billion yuan and a net profit attributable to the parent company of 50 billion to 57 billion yuan in the first half of 2026, which will offset all accumulated losses since the company's establishment.

According to Wind data, the market's consistent expectations for Changxin Technology's net profit attributable to the parent company in 2027 and 2028 are approximately 215.3 billion yuan and 314.4 billion yuan, respectively. Based on the expected net profit for 2027, Changxin Technology's current market value corresponds to a P/E ratio of approximately 15 times.

Based on the current market value, Changxin Technology's closing market value of 3.28 trillion yuan is close to half of Micron Technology's market value (approximately 1.04 trillion US dollars).

Capacity Competition

The sustained growth rate of Changxin Technology's performance determines how far its stock price can go.

On the eve of Changxin Technology's listing, South Korea announced a total scale of approximately $950 billion in artificial intelligence cooperation plans, with SK Hynix and Nvidia's cooperation exceeding $500 billion, jointly developing high bandwidth memory (HBM). In addition, Samsung Electronics has signed a memorandum of cooperation with Broadcom for up to $200 billion. SK Group Chairman Choi Tae won publicly stated that Nvidia's estimate of the demand for storage chips in the next five years may soon be proven to be still low.

The intensity of demand can also be confirmed by inventory and exports. The reporter learned in the interview that currently, the DRAM and NAND inventories of storage suppliers and cloud computing vendors have dropped to about half of the normal level, and South Korea's semiconductor exports in the first 20 days of July have also increased significantly year-on-year.

The differentiation on the price side is also deepening. A person who has been tracking the storage industry chain for a long time told reporters that the contract price negotiations for DRAM products in the third quarter are still ongoing. From the current shipment prices, the month on month increase for server DRAM to top customers is about 15%, the month on month increase for PC DRAM is about 20% to 25%, the month on month increase for enterprise solid state drives is not less than 20%, and the price increase for mobile DRAM is the smallest, expected to be between 10% and 15%, because domestic mobile phone manufacturers are already under great cost pressure.

In his opinion, prices will still rise overall in the fourth quarter, but the magnitude will be more stable than in the third quarter, and the differentiation between products will also be more obvious. He believes that if there are signs of a peak in storage prices, it is more likely to occur first in consumer terminals such as smartphones, and the demand for servers and computing power will be difficult to ease in the coming years.

The price trend is also directly related to Changxin Technology's own expansion plan. According to the prospectus, Changxin Technology's IPO funds will mainly be invested in DRAM technology upgrades, mass production line upgrades, and forward-looking technology research and development.

The industry insiders mentioned above stated that the construction cycle of DRAM wafer fabs has been extended to two to three years, with a single plant investment of over 20 billion US dollars. The new production capacity of the three major original factories will not be put into operation until the end of 2027 at the earliest. However, Changxin Technology's new round of production capacity may be released first in mid-2027, and its market share is expected to significantly increase at that time.

The signal of expanding production also appears on the equipment procurement side. According to data from the Hefei Municipal Bureau of Commerce, the total import and export value of goods trade in Hefei reached RMB 126.7 billion in the first quarter of 2026, a year-on-year increase of 33.7%. In a related research report released by Bank of America Securities in April, the import data of equipment in Anhui Province was further broken down: in March this year, the import value of semiconductor equipment in Anhui Province reached 226 million US dollars, significantly higher than the level of about 110 million US dollars per month in the second half of 2025, of which lithography equipment accounted for 57%. Bank of America Securities infers that Changxin Technology has initiated a new round of equipment procurement.

The three major international original factories are also intensifying their efforts to compete for production capacity. According to public information, Samsung Electronics has advanced the production target of Longin Semiconductor's first wafer fab to 2029, SK Hynix plans to build Longin's first wafer fab by February 2027, and Micron Technology has increased its capital expenditure for the 2026 fiscal year to approximately $27 billion.

In addition, according to the current market value of Changxin Technology, multiple market institutions predict that it will enter the Sci Tech Innovation 50 Index as early as September this year. Once included, all fund products tracking the index will passively buy shares of Changxin Technology based on their weights.

The scale and pace of this incremental funding will become another variable worth observing after Changxin Technology goes public.

(Author Zheng Chenye)