First, the conclusion
Changxin Technology's IPO has become a symbolic event in 2026 for the Chinese semiconductor market. This is no longer just a story about a domestic DRAM company going public.
Due to the combination of DRAM market conditions and AI demand, the outlook for Changxin Technology, which had been a loss-making company, changed in a short period of time. This is where the policy theme of the U.S.-China semiconductor decoupling comes in: ``Will China mass-produce DRAM on its own and move toward high-performance products?'' What the capital market evaluates is not just the growth of a single company, but also the ability of China's memory industry itself to execute.
There are too many materials that the market likes. AI, domestic production, national capital, science and technology board large-scale IPO, profitability. With such a long line up, it's easy to get ahead of the curve immediately after listing. What investors should be looking at is not ``Is it a great IPO?'' but rather the question to what extent DRAM profits during the boom can be evaluated as sustainable profits.
what is happening
On July 9, 2026, Changxin Technology disclosed a letter of intent to invite the company to be listed on the Science and Technology Board, as well as a public notice of issuance and exclusion, and began the IPO issuance procedure. The purchase date of Shinmata's purchase date and the date of purchase of the certificate are both set to be July 16, 2026.
The planned solicitation amount is 29.5 billion yuan. According to the Securities Times in an article in the Shanghai Securities News, it is the largest A-share IPO since 2026, and the Science and Innovation Board says it is the second-largest IPO in history after Zhongxin International.
In terms of issuance, the number of initial public shares was 6.688 billion shares, equivalent to approximately 10.00% of the total number of shares issued. The initial strategic allocation is 3.344 billion shares, 50.00% of the initial number of shares issued. This ratio has a significant effect on short-term supply and demand. It's a huge deal for a deal to hit the public market, but strategic allocations and lockups will reduce some of the initial float. It's easy to misread this by just looking at the initial price.
How to view performance
The reason why Changxin Technology is being talked about as a buy so much is because its business performance has changed so rapidly.
According to Cailiansha, the company will have sales of 61.799 billion yuan and attributable net profit of 1.875 billion yuan in 2025, turning a profit from a deficit in 2024. In the first quarter of 2026, sales increased to 50.8 billion yuan, an increase of 719.13% compared to the same period last year, and attributable net profit expanded to 24.762 billion yuan.
Furthermore, the company's first-half forecast calls for sales of 110 billion to 120 billion yuan and attributable net profit of 50 billion to 57 billion yuan in the first half of 2026. Compared to the same period last year, sales increased by 612.53% to 677.31%, and attributable net income increased by 2,244.03% to 2,544.19%.
| index | Forecast for the first half of 2026 | What the market means |
|---|---|---|
| Sales | 110 billion to 120 billion yuan | Strength of AI/high-performance DRAM demand and price increases |
| Attributable net income | 50 billion to 57 billion yuan | Profit leverage after turning profitable |
| 1Q sales | 50.8 billion yuan | Very fast progress against first half forecasts |
| 1Q attributable net income | 24.762 billion yuan | Simultaneous occurrence of profit margin improvement and price increase |
What we want to look at here is the nature of the profits rather than the size of the numbers. In DRAM, even small changes in product prices, utilization rates, yield rates, and product mix can cause large swings in profits. This rapid recovery appears to be due to the simultaneous effects of demand for AI computing power, production allocation by major overseas companies, a generational shift toward high-performance products, and Changxin Technology's own scale expansion.
Current profits are strong. The question is how much of the booming memory market can be capitalized on as regular profits. If we take this lightly, we will end up multiplying the highest profit of cyclical stocks by a high multiple.
Profit leverage brought about by the AI boom
Changxin Technology's tailwinds are not limited to AI servers.
For AI servers, it is easy to focus on GPUs and ASICs, but in reality demand is expanding to include DRAM, HBM, SSDs, networks, power supplies, and cooling. Furthermore, PCs, smartphones, and AI terminals will continue to migrate to DDR5 and LPDDR5/5X. As the amount of data processed increases, memory bandwidth and capacity become more important.
The company mainly develops products in the DDR series and LPDDR series, and as the generation transition to DDR5 and LPDDR5/5X progresses, improvements in unit price and mix will likely have an effect on profits. If manufacturing process miniaturization, yield improvements, and operating rates increase, the fixed cost leverage of IDM manufacturers will increase significantly.
Just because demand for AI is strong does not mean that DRAM manufacturers will win side by side. High-performance DRAM requires customer certification, quality stability, long-term supply, thermal design, and packaging. It is significant that Changxin Technology has reached the position of ``No. 1 in China and No. 4 in the world.'' However, the top three companies, Samsung Electronics, SK Hynix, and Micron, still have strong barriers in terms of scale, customer base, and experience in mass production of cutting-edge products.
Use of proceeds of 29.5 billion yuan
Changxin Technology's 29.5 billion yuan will be concentrated on its main DRAM business.
| Investment destination | amount | the aim |
|---|---|---|
| Existing equipment crystal industry manufacturing quantity technology line modification items | 7.5 billion yuan | Improve efficiency, operation, and yield of existing mass production lines |
| DRAM equipment technology items | 13 billion yuan | Transition to advanced processes and advancement of product generations |
| Activities for the development of research equipment in front of the equipment | 9 billion yuan | Research and development of next-generation DRAM and advanced technology including HBM |
The allocation of funds is fairly clear. In the short term, it will increase mass production efficiency and utilization rate, in the medium term it will increase competitiveness for DDR5 and beyond, and in the long term it will connect to HBM and next-generation memory.
What the market is really concerned about is how quickly the 13 billion yuan in sophistication of DRAM technology and the 9 billion yuan in front-end technology development will lead to mass production of high value-added products. HBM is a core component of AI semiconductors, but it involves not only DRAM cell technology, but also TSV, advanced packaging, heat, inspection, and certification with GPU manufacturers. Funding is a necessary but not sufficient condition.
National capital and strategic allocation
Changxin Technology is more like a company that is responsible for China's domestic semiconductor production project than a private company that is growing on its own.
According to the Securities Times, major shareholders before the issue include Big Fund II, Hefei-affiliated state capital, and Anhui Province Investment, as well as industrial capital such as Aliba, Xuan, Xiaomi, and Zhaoyi Enterprise. The fact that the initial strategic allocation is set at 50% of the number of issues issued also indicates that this IPO is not just a matter of raising funds, but is a project that combines policy capital, industrial capital, and financial capital.
This is a strength. Policy support and deep capital are important for making huge factory investments, research and development, acquiring human resources, and cultivating customers. Semiconductor memory does not continue based on will alone. The moment the funding runs out, the technology roadmap also stops.
However, the stronger the national strategy, the more susceptible to U.S. export regulations, restrictions on equipment, materials, and EDA, hiring decisions by overseas customers, and political risks in the supply chain. The market is seen as `strong because of policy support.'' For the same reason, it is also viewed as `directly bearing geopolitical risks.''
Interpretation in the stock market
Changxin Technology's IPO has given rise to two interpretations in the A-share market.
The first is a reassessment of semiconductor and AI-related stocks. With Changxin Technology headed for listing, it is likely that there will be associative buying in the domestic supply chain for manufacturing equipment, materials, parts, sealing, memory modules, EDA, and other products. Around July 9th, interest in Changxin Technology and semiconductor equipment stocks increased. The theme is easy to understand.
The second concern is supply and demand. With a scale of 29.5 billion yuan, it also has a large capital absorption capacity. Large IPOs become a symbol when the market's risk tolerance is high, but when market sentiment collapses, they can easily be seen as a cash grab. This project is easy to attract demand due to its strong performance and theme. Even so, if the public price and market capitalization become too high, the good news becomes an excuse to take profits.
To be honest, the difficult part here is the price. The company's strategic importance is high. However, the stronger the story of domestic semiconductor production, the more likely the initial valuation will be based on the dream. Investors have to look at how many times they will value profits during boom times and how much they can withstand if the DRAM market declines.
bullish scenario
In the bullish scenario, AI server investment will continue for a long time, and demand for DDR5, LPDDR5/5X, and DRAM for high-performance servers will remain high. Changxin Technology will raise yields and unit prices by remodeling its mass production line and advancing technology, and will increase adoption by domestic Chinese customers.
In this case, the company will be evaluated from a `domesticization theme'' to a `major DRAM company that generates profits.'' Furthermore, if HBM-related research and development is talked about with the prospect of mass production, it will be easy to get a premium on A shares as an AI infrastructure stock. What the market wants to buy is not only the policy story, but also the repeatability of profits.
In the Chinese market as a whole, the impact will continue to spread to companies related to semiconductor equipment, materials, packaging, memory modules, and AI servers. The listing of Changxin Technology will be an event that will gauge the risk tolerance of domestic funds towards Chinese high-tech stocks.
bearish scenario
In the bearish scenario, the rise in DRAM prices will come to an end, supply adjustments by major overseas companies will change, and the memory market will turn around sooner than expected. Changxin Technology's profits expanded rapidly due to fixed cost leverage, so they tend to swing in the opposite direction when prices decline.
Another risk is technology. Even if DDR5 and LPDDR5/5X are adopted in the market, HBM and advanced processes will be more difficult to mass produce. Even if they invest money, if yield, reliability, and customer certification are delayed, investors' expectations will be lost.
Regulations between the US and China cannot be ruled out. Increasing constraints on equipment, maintenance, materials, EDA, and tip packaging will make it difficult to upgrade the technology as planned. Precisely because they have the support of national capital, their presence as a subject of regulation increases. This is where Changxin Technology's strengths and weaknesses lie.
Featured KPIs
The initial price is not the only indicator to look at after listing.
| KPI | Reason to watch |
|---|---|
| Public price and issue market capitalization | To what extent are expectations incorporated? |
| DRAM average selling price | Measuring the dependence of profits on market conditions |
| DDR5/LPDDR5/5X ratio | Sustainability of product mix improvement |
| Gross profit margin and operating profit margin | Comprehensive results of yield, utilization rate, and price |
| Capital investment and depreciation | Quality of profits and future burden |
| HBM related development progress | Conditions for re-evaluation as an AI memory company |
| US regulations/equipment procurement | Technology roadmap constraints |
In particular, the gross profit margin cannot be overlooked. High profit margins look attractive when the DRAM market is good, but evaluations will vary greatly depending on whether it is a temporary boost due to price increases or structural improvements due to improved yields and higher added value of products.
summary
Changxin Technology's July 16 purchase is a turning point for China's DRAM industry to become a central theme in the capital market.
The company saw a rapid recovery in its business performance thanks to tailwinds from demand for AI memory. The expected profit scale for the first half of 2026 will significantly change the image of a company in the red. The 29.5 billion yuan procurement will go toward mass production lines, DRAM technology, and next-generation research and development, and will also help China become more self-sufficient in semiconductors.
The more good materials there are, the higher the expectations for the evaluation at the time of listing. DRAM is subject to strong economic cycles, and when demand for AI is strong, the seeds of increased production and price reversals are likely to grow. When looking at Changxin Technology, I would like to evaluate the story of domestic production and the explosive power of its business performance, while also weighing the memory market, HBM mass production, US-China regulations, and initial valuation with equal weight.
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source
- Shanghai Stock Exchange "688825 Changxin Technology IPO Information" confirmed on July 12, 2026. https://www.sse.com.cn/ipo/bookbuilding/detail/index.shtml?securityCode=688825
- Securities Times/Shanghai Securities News, “Second largest IPO in history of science board has arrived. https://www.stcn.com/article/detail/4010092.html
- Zairiansha Science and Technology Board Daily "Prerequisite success! Long-term science and technology update technology board IPO invitation book Existence behavior trend Q1 industry "Crazy"" May 18, 2026. https://m.cls.cn/detail/2373552
- Shanghai Securities News "Second largest IPO in history of science board has arrived, Changxin Technology will open on July 16, 2026," July 10, 2026. https://paper.cnstock.com/html/2026-07/10/content_2242541.htm