Chinese chipmaker Cambricon Tech set to raise $367.8m in IPO

Photo by Alexandre Debiève on Unsplash

AI chipmaker Cambricon Technologies Corp said it will raise 2.58 billion yuan ($367.76 million) in its Shanghai initial public offering after pricing the listing at 64.39 yuan a share.

Chipmakers like Cambricon are lining up to list in China, seeking to exploit a bullish market and strong investor appetite for a sector crucial to Beijing’s rivalry with Washington for technology supremacy.

The announcement comes days after Chinese chipmaker Semiconductor Manufacturing International Corp (SMIC) said it would raise $6.6 billion, in what will be the world’s biggest listing so far this year, based on Refinitiv data.

Cambricon’s IPO price tag values the company at 58.03 times its 2019 sales based on the post-IPO capital base. That compares with an average price-to-sales ratio of 34.54 for five China-listed peers,according to the exchange filing.

Companies turned to Shanghai’s one-year-old tech-heavy STAR Market to raise $6.96 billion via listings in the first half. This dwarfed Shanghai’s main board and has made STAR Market the world’s second-biggest IPO venue, trailing only Nasdaq, where companies raised $15.5 billion in the first half, based on Refinitiv data.

China has been stepping up capital market reforms amid tech-related tensions with the United States.

The official China Securities Journal said on Monday China’s economy was recovering, while its capital markets are undergoing reform and attracting money from home and abroad, setting the scene for a healthy bull market.

Cambricon is offering 40.1 million new shares, and will use the IPO proceeds to fund three chip projects and to replenish working capital.

The company’s net loss ballooned to 1.18 billion yuan in 2019, from 41 million yuan a year earlier, although its revenue more than tripled to 443.9 million yuan, the company’s prospectus said.

Huawei subsidiary HiSilicon used to be a key source of revenue for Cambricon, but in 2019 decided to develop AI chips itself, becoming a direct competitor, the company said in the prospectus.

Reuters

Singapore Reporter/s

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Following vacancies can be applied for (only in Singapore).   

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Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.