Shares of Chinese artificial-intelligence chipmaker Enflame surged in their Shanghai market debut on Friday, September 11. The stock opened at 410 yuan, compared with an offer price of 142.18 yuan, climbed as high as 475 yuan and later traded near 430 yuan.
The near-200% gain came during a broad decline in Asian markets. The Associated Press recorded a rise of roughly 180% for Enflame while the Shanghai Composite fell, highlighting the contrast between investor demand for AI-linked companies and the weaker wider market.
A $912 million IPO
Enflame raised 6.12 billion yuan, approximately $912 million, by selling 43.04 million new shares on Shanghai’s technology-focused STAR Market. The offer price valued the company at about 61.2 billion yuan. At around 430 yuan per share, its market value reached roughly 185 billion yuan, more than three times the IPO valuation.
China’s AI-chip race
The Shanghai-based company develops graphics processors and computing systems used to train and run artificial-intelligence models. It is one of a group of Chinese manufacturers known locally as the “four little GPU dragons,” alongside Moore Threads, MetaX and Biren Technology.
Investor interest has grown as China seeks to reduce reliance on foreign suppliers amid U.S. restrictions on access to advanced chips. Demand for AI infrastructure has made domestic semiconductor manufacturers a focus of Chinese capital markets.
Tencent concentration
Tencent remains Enflame’s largest shareholder, with a 17.95% stake after the offering. The prospectus also shows substantial customer concentration: Tencent-related sales represented 83.79% of Enflame’s 2025 revenue.
That dependence and the company’s continued losses remain important risks. Enflame posted a 1.16 billion yuan net loss in 2025, narrower than 1.51 billion yuan a year earlier, while revenue rose 37% to 990.2 million yuan.
Funding new generations of chips
Enflame forecasts revenue of 2.3 billion to 3 billion yuan for the first nine months of 2026 and a net loss of 700 million to 860 million yuan. It expects to break even or become profitable in 2026 or 2027, depending on revenue growth and margins.
Most IPO proceeds will finance fifth- and sixth-generation AI chips, related software and large-scale computing systems. The strong debut reflects sector enthusiasm but does not remove the risks associated with losses, customer concentration and intense technological competition.
