ChangXin Memory Technologies Inc., known as Cxmt Corporation (SH: 688825), is scheduled to commence trading on July 27, following the announcement of its online lottery results on July 19, which produced over 7.7 million winning allotments. Each successful applicant can subscribe to 500 shares at an offering price of 8.66 yuan per share, requiring a payment of 4,330 yuan per lot.
The company is issuing approximately 6.688 billion shares, raising about 57.9 billion yuan. This capital raise surpasses the 53.2 billion yuan raised by SMIC in 2020, establishing it as the largest initial public offering ever on the STAR Market. At the issue price, the company's post-listing valuation is estimated at approximately 579.2 billion yuan.
Alibaba Group Holding Limited (BABA) emerges as a significant pre-IPO investor. According to the prospectus, Zhejiang Alibaba Cloud Computing Co., Ltd. holds a 3.85% stake, making it the sixth-largest shareholder and the largest industrial investor in the final pre-IPO financing round. Alibaba (China) Network Technology Co., Ltd. holds an additional 1.12%. Combined, these Alibaba entities hold a 4.97% stake in Cxmt, representing a total investment of roughly 7.6 billion yuan. Based on the IPO valuation, this stake is valued at nearly 130 billion yuan, indicating a remarkable paper return of approximately 17 times.
CICC (HKEX: 03908) played a pivotal role as a joint sponsor and lead underwriter. The company was granted the exclusive over-allotment option (greenshoe). Per the issuance announcement, the joint lead underwriters have already overallotted about 1.003 billion shares to online investors at the 8.66 yuan issue price, representing 15% of the initial offering. If fully exercised, CICC would need to invest approximately 8.7 billion yuan, positioning it as a major shareholder. Furthermore, through its wholly-owned subsidiary CICC Wealth, CICC participated in the strategic placement, committing to 2% of the offering (excluding the greenshoe), or about 134 million shares, subject to a 24-month lock-up period. Prior to the IPO, CICC and related parties already held a 0.32% stake in Cxmt through various investment vehicles.
Similarly, CSC Financial Co., Ltd. (HKEX: 06066) served as a joint sponsor and lead underwriter, sharing underwriting fees with other institutions. Based on the 29.5 billion yuan fundraising target, the comprehensive underwriting fee rate is estimated at about 0.62%, translating to total fees of roughly 184 million yuan. CSC participated in the strategic placement through its subsidiary CSC Investment, also committing to 2% of the offering (about 134 million shares) and ultimately receiving an allotment of approximately 115 million shares worth around 1 billion yuan, also locked up for 24 months. Prior to the IPO, CSC had already established an indirect stake of about 0.15% (diluting to roughly 0.13% post-issue) in Cxmt through its investment arm and associated funds.
Everbright Securities noted that insurance capital holds a 4.1% pre-IPO stake in Cxmt, with PICC and Sunshine Insurance being major participants among listed insurers. The impact on their financial statements varies depending on the accounting model used.
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