Subscription for the largest IPO ever on China's STAR Market has officially begun, with the debut of the domestic DRAM leader sparking significant investor interest.

The online subscription for Cxmt Corporation (ASX: 688825) opened on July 16, with an offering price set at 8.66 yuan per share. A single lot consists of 500 shares, requiring a payment of 4,330 yuan for successful applicants. This fundraising round could reach a maximum of 66.6 billion yuan. If successful, it would surpass the 53.2 billion yuan record set by SMIC in 2020, becoming the largest IPO in the history of the STAR Market. Based on the average first-day gain of 489.83% for STAR Market new listings this year, the estimated profit per lot for Cxmt Corporation is approximately 21,200 yuan. If calculated using the average first-day gain of 285.47% for all market new listings, the estimated profit per lot is about 12,400 yuan.

It is noteworthy that some institutions project the company's post-listing market capitalization could exceed 2 trillion yuan, with Huaxi Securities positioning it as a "new valuation anchor for hard technology." However, Professor Li Guoping from Central University of Finance and Economics cautioned that the company's price-to-earnings ratio of 308.92 times is significantly higher than the industry average. He indicated that short-term stock price movements will largely be driven by sentiment, potentially leading to high volatility in the initial listing period, and advised investors to have a clear holding strategy.

Record-Breaking Fundraising with a Single Lot Cost of 4,330 Yuan

The initial public offering involves 6.688 billion shares, representing approximately 10% of the total share capital post-issuance. The joint sponsor, China International Capital Corporation, has been granted an over-allotment option (Greenshoe mechanism) of up to 15%. If fully exercised, the total number of shares issued would increase to 7.691 billion.

At the offering price of 8.66 yuan per share, the estimated total funds raised before exercising the over-allotment option are about 57.919 billion yuan, with net proceeds around 57.638 billion yuan. If the Greenshoe is fully exercised, the total funds raised would reach 66.607 billion yuan, with net proceeds of approximately 66.310 billion yuan. Wind data shows that Cxmt Corporation is the new listing with the highest number of shares issued so far this year and the largest share issuance in STAR Market history.

The offering price corresponds to a non-diluted price-to-earnings ratio of 308.92 times for 2025 (before exercising the over-allotment option), significantly exceeding the industry average P/E of 76.32 times and the average P/E of 134.62 times for comparable companies. Based on the total share capital post-listing, the company's valuation at listing is estimated at 579.178 billion yuan. Professor Li Guoping pointed out that this valuation is considerably lower than some earlier institutional forecasts of one trillion or even three trillion yuan, leaving room for profit potential in the secondary market. Furthermore, the pricing in the 8-yuan range may attract a large number of retail investors who already have STAR Market trading permissions.

Subscription Requirements: Dual Thresholds of Qualifications and Market Value

Participating in the subscription requires meeting both qualification and market value conditions. For qualifications, investors must have pre-opened STAR Market trading permissions, with average daily assets in their securities and fund accounts not less than 500,000 yuan for the 20 trading days prior to application, and at least 24 months of securities trading experience.

Regarding market value, the average daily holding of Shanghai market value for the 20 trading days before T-2 must be no less than 10,000 yuan. Each 5,000 yuan of average daily Shanghai market value corresponds to one subscription unit (500 shares). The maximum subscription requires a Shanghai market value allocation of 33.49 million yuan. The online subscription upper limit is 3.349 million shares.

In terms of the schedule, the winning rate and allotment numbers will be announced on July 17 (T+1 day). The lottery results will be announced on July 20 (T+2 day), and successful applicants must ensure sufficient funds are available in their accounts before 16:00 that day for automatic deduction. Final allotment results will be confirmed on July 21. Additionally, only one Shanghai market value account can be used to subscribe for each new stock, and subscriptions cannot be revoked once confirmed.

Based on various institutional forecasts, the estimated online winning rate is expected to fall between 0.30% and 0.70%. As the number of shares for online distribution increases significantly after the activation of the over-allotment option, the actual winning rate may be higher than these predictions.

Potential Profit Per Lot: A Comparative Analysis

Choice data shows that as of July 15, a total of 77 new stocks have been listed this year, with an average first-day gain of 285.47%. Calculated based on the first-day closing price, the average profit per lot is about 53,700 yuan, the best performance in the past three years and 2.1 times that of 2024. Among these, the profit per lot for STAR Market listings reached 108,700 yuan, significantly higher than other sectors.

Calculating the potential profit per lot for Cxmt Corporation using two benchmarks: using the average first-day gain of 285.47% for all market new listings this year yields an estimated profit of about 12,400 yuan per lot. Using the average first-day gain of 489.83% for STAR Market new listings yields an estimated profit of approximately 21,200 yuan per lot.

The most profitable new stock this year was Lianxun Instrument, with a profit per lot reaching 358,600 yuan. Changjin Photonics ranked second with about 309,500 yuan. The profits per lot for Zhenbao Technology, Hengyunchang, Dapuwei, and Tuolunsi were approximately 270,200 yuan, 139,600 yuan, 99,200 yuan, and 97,100 yuan, respectively. It is important to note that these high-return cases are concentrated in a few popular sectors and are not broadly representative.

Post-Listing Impact: Capital Diversion and Industry Chain Restructuring

From an industry chain perspective, Aijian Securities believes that all the funds raised by Cxmt Corporation will be directed towards DRAM capacity expansion and advanced process iteration. Coupled with the sustained high demand for computing power from AI servers, the logic for domestic DRAM substitution continues to strengthen, potentially driving performance elasticity across the entire chain from storage manufacturing and component distribution to storage modules. GF Securities also noted that the value and importance of upstream infrastructure related to AI memory will continue to rise.

A brokerage investment advisor also pointed out that the substantial size of Cxmt Corporation's listing could temporarily divert market funds. If a peak in the memory price cycle coincides with a mean reversion of high-valuation stocks, valuations in some segments might face pressure.

Huajin Securities highlighted that while the new stock pricing cycle indicator has converged, it remains at historically high levels. The semi-annual report disclosure period might amplify market apprehension towards high valuations. The institution recommends maintaining caution towards the new and secondary new stock sectors, emphasizing rhythm control and flexibility in a high-volatility market. It also suggests focusing on segments within the new quality productive forces industry chain, such as computing power AI, commercial aerospace, and energy infrastructure, which possess sustained catalysts and long-term growth potential.

According to calculations by CITIC Securities, based on buying at the first-day closing price of new stocks, the average cumulative declines for new listings since 2024 on the second day, fifth day, 30th day, and 90th day after listing have exceeded 5%, 13%, 12%, and 14%, respectively. The corresponding proportions of stocks that rose were only 27%, 19%, 21%, and 19%. This data indicates that the first-day performance of new stocks, to some extent, exhausts short-term price appreciation potential, and investors considering chasing gains upon listing should carefully assess the risks.