(Bloomberg)– Moore Threads Technology Co., one of China’s leading makers of artificial intelligence chips, surged in its trading debut in Shanghai after raising 8 billion yuan ($1.13 billion) in the year’s second-largest IPO.
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The company’s shares soared 469% after being sold at 114.28 yuan apiece in the IPO. Investor interest in the offering was strong, with the retail portion oversubscribed 2,750 times, even after a recovery, making it the second most sought-after onshore IPO for more than $1 billion since 2022, according to Bloomberg data.
The debut comes as optimism about China’s drive to achieve technological self-sufficiency grows, fueled by trade tensions and fears of U.S. technology restrictions. The company is also among those benefiting from the market share void left by Nvidia Corp.’s forced exit. Earlier this year, regulators relaxed rules for listing unprofitable companies on the Nasdaq-like Star Board to support local startups.
Moore Threads has a competitive technological advantage and can benefit from the “domestic substitution trend” given U.S. trade frictions and Beijing’s efforts to develop domestic champions, Fan Zhiyuan, an analyst at Sinolink Securities Co., wrote in a note. It is also the only Chinese company capable of manufacturing general-purpose graphics processing units, he added.
Proceeds from the IPO will finance next-generation projects in the areas of 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.
Moore Threads’ net loss was 724 million yuan in the first three quarters of the year, Sinolink Securities added, down 19 percent from the same period last year. At the same time, revenue jumped 182% to 780 million yuan.
Its valuations nevertheless remain high. Moore Thread’s price-to-sales ratio, at 123 times the offering price of 114.28 yuan per share, is higher than the 111 times average for its peers, according to a Dec. 4 filing. The company recently asked its main sponsor to remind investors of the risks associated with its valuations.
Origins
Founded in 2020 by former Nvidia executive Zhang Jianzhong, Moore Threads began generating revenue from graphics chips for gaming and visual rendering before shifting its focus to AI accelerators used to power large language models.
