ChangXin Memory Technologies, China's largest memory chipmaker, is set to debut on the Shanghai Stock Exchange with a valuation that could exceed $425 billion, making it potentially more valuable than the Industrial and Commercial Bank of China.
This valuation is being driven by a perpetual futures contract linked to CXMT on the decentralized exchange Hyperliquid, which allows investors to speculate on the company's worth before its official listing.
The contract recently traded at $6.35 per share, reflecting a significant premium over the initial offer price of 8.66 yuan ($1.28) per share, which would value the company at 579 billion yuan at listing.
The high valuation is partly attributed to offshore investors seeking exposure to the IPO, as access to the Shanghai listing is restricted for foreign investors and requires significant capital and experience for domestic retail investors.
Analysts suggest that the inflated price reflects both a forecast of demand and the limited access to the stock, with Eric Chen from Injective Labs noting that the market is more about speculation than precise valuation.
The listing comes during a favorable period for the memory chip industry, driven by AI demand and supply shortages, and CXMT aims to raise up to $8.6 billion in what would be Asia's largest IPO this year.
However, the speculative nature of trading on platforms like Hyperliquid has raised concerns about regulatory scrutiny and market integrity, as the Monetary Authority of Singapore has flagged the platform for being unlicensed.
Once CXMT lists, the futures contract will adjust to the actual trading price, and any discrepancies are expected to close quickly, reflecting the underlying demand and access barriers in the market