- Enflame shares rose 206% on their Shanghai debut, with the retail tranche drawing orders for more than 6,000 times the shares available before the company reallocated additional stock to that group. Tencent-backed Enflame is the last of China’s four little dragons of AI chipmaking to go public.
- Every member of the group has surged on listing and held those gains. MetaX rose nearly 700% on its first day in December, Moore Threads gained over 400%, and Biren jumped 76% in January. Separately, DRAM maker CXMT soared almost 466% on its July STAR Market debut, briefly making it the most valuable China-listed company.
- The bet is on domestic chips displacing Nvidia. International chipmakers led by Nvidia held nearly 60% of China’s AI accelerator market in 2025 per IDC data in Enflame’s prospectus — a share now squeezed by US export controls and Beijing’s reluctance to import advanced chips.
- Enflame’s fundamentals are early-stage relative to the valuation. Revenue reached 990 million yuan (about $147 million) in 2025, up from 722 million yuan, and the company has yet to turn a profit. IPO proceeds are earmarked for developing and commercializing fifth- and sixth-generation chips aimed at matching high-end international performance.
What Happened?
Enflame, founded in 2018 and backed by Tencent, listed in Shanghai and closed its first session up 206% on extraordinary retail demand. The listing completes the public-market debut of China’s four leading AI chip startups. Goldman Sachs said in an August report that expanding foundation models and AI applications in China are driving development across AI chips, foundries, memory and advanced packaging, and projects Chinese semiconductor capital spending reaching $82 billion by 2030 on memory and advanced-node capacity expansion.
Why It Matters?
The more consequential signal is not the pop but the software running on these chips. Z.ai says its GLM-5.3-Flash model runs entirely on China-made silicon, likely a mix of Huawei, Enflame and other domestic parts, and Moonshot AI’s Kimi K3 has closed much of the gap to frontier US models. That combination — competitive models trained and served on domestic hardware — is what export controls were designed to prevent, and it suggests the restriction is accelerating substitution rather than capping capability. Alibaba is building its own chips and software stack on the same logic. For investors, the valuations carry obvious risk: a company with $147 million in revenue and no profit is being priced on national-champion status rather than cash flow, and the 6,000x retail oversubscription points to a market with more enthusiasm than float.
What’s Next?
Watch whether the four dragons hold their listing gains once lockups expire and the float expands, since the scarcity driving these prices is partly mechanical. The real test is fifth- and sixth-generation silicon actually reaching performance parity with high-end international parts, which Enflame has funded but not yet demonstrated. On the policy side, any further tightening or loosening of US export controls now cuts both ways: restrictions reinforce the domestic substitution story that is inflating these valuations. Track Nvidia’s disclosed China exposure and whether that 60% market share figure erodes in 2026 data.
Source: CNBC
