Tencent-backed Enflame triples on Shanghai debut as AI chip listings surge

Shanghai Enflame Technology made a blistering start to life as a listed company, with its shares opening at 410 yuan on the STAR Market on Friday against an offer price of 142.18 yuan. The stock climbed as high as 475 yuan before settling near 430 yuan, a gain of roughly 200% that lifted its market value to about 185 billion yuan — more than triple the valuation implied by the IPO price.

The AI chipmaker raised 6.12 billion yuan (about $912 million) by selling 43.04 million new shares, equal to 10% of its enlarged share capital. The offer valued the company at around 61.2 billion yuan.

The debut came on a weak day for Chinese equities, with the STAR Market down more than 2% and the CSI 300 Index off 1.43%.

Enflame is one of a group of Chinese AI chip startups often described as the "four little GPU dragons", alongside Moore Threads, MetaX and Biren Technology. Their rise reflects Beijing's push for domestic alternatives to U.S. suppliers such as Nvidia, a drive that has gathered pace amid American restrictions on Chinese access to advanced chips.

"Currently, subscription for new shares in the A-share market is one of the few investment approaches that can bring definite returns to investors," said Shen Meng, director at Beijing-based boutique investment bank Chanson & Co. He added that GPU-related businesses offer clearer growth prospects than some concept stocks with weaker fundamentals, while U.S. curbs have sharpened interest in local alternatives.

Tencent is Enflame's largest shareholder with a 17.95% stake after the offering and was its biggest customer before listing. Sales linked to the Shenzhen-based internet giant accounted for 83.79% of Enflame's 2025 revenue, according to its prospectus.

The company has yet to post 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. For the first nine months of 2026, Enflame forecasts revenue of 2.3 billion to 3 billion yuan and a net loss of 700 million to 860 million yuan. It expects to break even or turn profitable in 2026 or 2027, depending on revenue growth and margins.

Most of the IPO proceeds will go towards developing its fifth- and sixth-generation AI chips, related software and large-scale computing systems.