Tencent-backed Enflame’s high-priced STAR IPO

Shanghai Enflame Technology Co., a Chinese artificial intelligence chipmaker, has completed an initial public offering on Shanghai’s technology-focused STAR Market. The listing brings a new publicly traded player into China’s AI hardware space after a period of active fundraising by domestic chip designers.

Enflame sold about 43 million shares in the offering, raising approximately 6.12 billion yuan, or around $911 million. The company is one of a group of leading Chinese AI chipmakers that have come to market this year, and it is described as the last of the so-called “four little dragons” to list.

The shares were priced at 142.18 yuan each, placing Enflame’s offer among the highest IPO prices in Shanghai and Shenzhen so far this year. That elevated pricing underscores the market’s willingness to assign a premium valuation to an AI-focused semiconductor designer in the current environment.

Investor interest was particularly notable among retail buyers. Bids from individual investors were around 4,000 times the number of shares allocated to that tranche, indicating heavy oversubscription on the retail side of the book.

Tencent Holdings Ltd. (0700.HK) is a key backer of Enflame, holding a roughly 20% stake in the chipmaker. This shareholding makes Tencent (0700.HK) one of the most significant owners of the newly listed company.

In addition to its equity position, Tencent is also described as a dominant customer for Enflame’s products. That commercial relationship links Enflame’s growth prospects to Tencent’s ongoing investments in artificial intelligence and cloud-based services.

Enflame’s listing adds to the group of domestic AI chipmakers tapping China’s capital markets to support development and scale. Being cited as the last of the “four little dragons” to go public frames the company within a small cohort of leading local AI semiconductor firms.

The company’s debut on the STAR Market highlights continued investor appetite for AI-related hardware and the importance of local chip design capabilities. The combination of a large capital raise, high offer price, and strong retail demand points to sustained interest in China’s efforts to expand homegrown AI-compute infrastructure.