New AI Darling? Chinese Chipmaker MetaX In Focus As Shares Skyrocket Nearly 700% On IPO Listing Day

MetaX Integrated Circuits Shanghai Co.'s shares skyrocketed 693% on Wednesday, when it listed at the Shanghai Stock Exchange following an initial public offering.

This was the best performance for a Chinese IPO in the $500 million–$1 billion mark in the past decade, as per Bloomberg data.

The company, similar to Chinese peer Moore Threads, manufactures graphics processing units for AI firms. The stock is expected to attract the investors that missed out on getting an allotment in the narrow IPO lottery.

Chinese investors are pinning their hopes on domestic chipmakers to counter the influence of US-based firms such as Nvidia, whose top-of-the line AI chips are prohibited from being sold to China under the Trump administration.

Notably, MetaX's IPO was priced at 104.66 yuan per share, with its surge taking its market cap over 332 billion yuan. Standing neck and neck with Moore Threads’ current market cap of 336 billion yuan.

MetaX’s price-to-sales ratio was at 56.4, in comparison to an average of 127.4 for peers like Cambricon Technologies Corp. and Advanced Micro Devices Inc., the firm's exchange filing said.

The company's shares were oversubscribed 2,986 times on the retail portion, seeing more demand than Moore Threads, whose shares were oversubscribed 2,750 times.

One of the reason's behind this notable oversubscription rate is that regulators are exercising caution with regards to the valuations at which firms offload new shares to the public. This would mean that companies need to be juxtaposed with their peers in China and on the global scale.

The country's authorities have acted to discourage highly priced IPOs in order to protect individual investors from losses.