Chinese chip boom creates billionaires despite losses
Shanghai Enflame Technology nearly tripled in value on its Shanghai trading debut on Friday, extending a wave of listings that has turned founders of loss-making Chinese artificial-intelligence chipmakers into billionaires as investors bet heavily on domestic alternatives to Nvidia. Enflame’s shares closed 179 per cent above their initial public offering price on the STAR Market, lifting the…
Enflame Technology's market debut on Friday saw its shares soar 179 percent above their initial offering price, catapulting the company's value to around 171 billion yuan. Despite never recording an annual profit since 2018, the Tencent-backed firm raised 6.12 billion yuan through the sale of 43.04 million new shares. The surge in valuation, however, came with substantial losses, as the company's revenue expanded from 301 million yuan in 2023 to 990.2 million yuan in 2025, while net losses narrowed from 1.67 billion yuan in 2023 to about 1.2 billion yuan in 2025.
Enflame forecasts revenue between 2.3 billion and 3 billion yuan for the first nine months of 2026, accompanied by a net loss of 700 million to 860 million yuan. The rapid growth in revenue has outpaced earnings due to heavy investments in research and product development. The company projects to break even or turn profitable by 2026 or 2027, with plans to allocate IPO proceeds towards the development and industrialization of advanced AI chips and computing systems.
Other Chinese semiconductor groups, such as Moore Threads Technology and MetaX Integrated Circuits, have also seen significant valuation increases following their Shanghai listings, further underscoring the unconventional economics of China's artificial-intelligence chip boom.
Written by urgent.news from Arabian Post's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
