Fourth 'little GPU dragon' set to fire up IPO market

Enflame Technology, a leading Chinese AI chipmaker, will commence share subscriptions for its six billion yuan initial public offering on September 2nd, according to a regulatory filing. The company, supported by Tencent Holdings, will issue 43.04 million new shares, constituting a 10 percent stake in its expanded share capital of roughly 430 million shares. Preliminary price consultations are scheduled to begin on August 28th.

Of the total allocation, 8.61 million shares are earmarked for strategic investors, while 27.54 million shares are set aside for institutional investors, and 6.89 million shares are reserved for retail investors. Established in 2018, Enflame joins four other Chinese companies known as the "four little GPU dragons." These firms have all gone public within the past year, capitalizing on global interest in semiconductor companies.

Enflame intends to utilize the proceeds from the IPO to develop and commercialize its fifth and sixth-generation graphics processing units, as well as advanced AI software and hardware collaborative innovation projects. Onshore technology IPOs in China are anticipated to experience their strongest year since 2023, as Beijing aims to increase the number of chip and artificial intelligence company listings as part of its strategy for tech self-reliance in response to the ongoing rivalry with the United States.

Citic Securities is serving as the lead underwriter for Enflame's offering, with Guotai Haitong Securities and GF Securities acting as joint lead underwriters.