China Chipmaker Moore Threads Soars 469% After $1.1 Billion IPO
(Bloomberg) — Moore Threads Technology Co., a leading Chinese artificial intelligence chipmaker, surged in its Shanghai trading debut after raising 8 billion yuan ($1.13 billion) in the year’s second-largest onshore IPO.
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The firm’s stock soared as much as 502% after being sold at 114.28 yuan a piece during the initial public offering. If gains hold, the debut would mark the biggest first-day pop for an IPO over $1 billion since China’s 2019 IPO reforms, according to data compiled by Bloomberg.
The listing comes as optimism over China’s drive for tech self-sufficiency intensifies, fueled by trade tensions and fears of US technology curbs. Moore Threads’ share frenzy stands out in an otherwise sluggish market, signaling strong investor appetite in specific sectors like this year’s AI winners.
Beijing-based Moore Threads is also among those benefiting from a market share void left by Nvidia Corp.’s forced exit. Earlier this year, regulators eased listing rules for unprofitable firms on the Nasdaq-style Star Board to bolster homegrown startups.
“A surge of this scale can be somewhat expected from the strong demand, and this is one of those flagship IPOs that will go on in history and be remembered,” said Shao Qifeng, chief investment officer at Ying An Asset Management Co. “However, from experience, such memorable IPOs don’t always bode well for their respective sectors as could be an indication of froth, at least in some corners.”
Proceeds from the IPO will fund next-generation projects in AI and graphics chips as well as supplement working capital. The offering ranks behind Huadian New Energy Group Co.’s $2.7 billion IPO in July. Investor interest in the offering was strong, with the retail portion oversubscribed 2,750 times even after a clawback, making it the second most sought-after onshore IPO over $1 billion since 2022, Bloomberg data shows.
Moore Threads’ net loss was 724 million yuan during the first three quarters of the year, according to a Sinolink Securities note, narrowing by 19% from the year ago period. Meanwhile, revenue surged by 182% to 780 million yuan.
Still, its valuations remain lofty. Moore Threads’ price to sales ratio at 123 times the offer price of 114.28 yuan per share is higher than the average of 111 times for peers, according to a Dec. 4 filing. The company recently asked its lead sponsor to remind investors of risks related to its valuations.
