China: Enflame surges nearly 200% in its stock market debut

The company raised 6.12 billion yuan, about 912 million dollars, by selling just over 43 million shares during its listing on the STAR Market, the technology segment of the Shanghai Stock Exchange. At around 430 yuan per share, its market capitalization approached 185 billion yuan, nearly three times the valuation set for the IPO.

Founded in 2018 in Shanghai, Enflame designs accelerators for data centers and artificial intelligence applications. Tencent will retain a 17.95% stake after the operation and remains its largest shareholder. The tech giant also accounted for 83.79% of Enflame’s revenue in 2025, according to the company’s documents.

The company remains unprofitable, reporting a net loss of 1.16 billion yuan in 2025 on revenue of 990.2 million yuan. For the first nine months of 2026, Enflame expects revenue between 2.3 and 3 billion yuan and a net loss of 700 to 860 million yuan.

In its prospectus, the company estimates it could reach breakeven or become profitable in 2026 or 2027, depending on its sales pace and margin developments. The funds raised are intended to finance the development and industrialization of its fifth and sixth generations of AI chips, as well as large-scale computing systems.

China’s race for AI chips

Enflame is the latest of four Chinese start-ups often referred to as the “four little dragons” of graphics processors to enter the financial markets, following Moore Threads, MetaX, and Biren Technology. Its listing comes as Beijing seeks to reduce its reliance on foreign components for artificial intelligence infrastructure.

This strategy has become particularly significant amid U.S. restrictions on advanced chips destined for China and manufacturing equipment. Nvidia maintains a dominant position in the Chinese AI accelerator market, but local manufacturers are striving to gain ground due to rapidly growing demand in data centers.

Prior to the listing, the portion allocated to individual investors was heavily oversubscribed. According to the South China Morning Post, around seven million online investors had placed orders, illustrating the Chinese market’s appetite for stocks related to artificial intelligence and semiconductors.