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Shanghai Enflame Technology, backed by Tencent Holdings, is set to begin trading in Shanghai Friday after raising about 6.12 billion yuan ($911m), as the last of the so-called \u201cfour little dragons\u201d of leading Chinese artificial intelligence chipmakers enters the public market.<\/p>\n
Enflame, in which Tencent holds a 20% stake and remains a dominant customer, sold about 43 million shares \u00a0on Shanghai\u2019s technology-heavy STAR Market at 142.18 yuan per share, the third-highest IPO price in Shanghai and Shenzhen this year. Retail investors bid for 4 000 times the shares available.<\/p>\n
Established in 2018, Enflame is following the IPOs of its \u201clittle dragon\u201d peers at a time when investor enthusiasm for the industry is fading. While Moore Threads Technology, Biren Technology, and MetaX Integrated Circuits initially drew intense demand, they all have retrenched substantially since. Moore Threads, which surged 425% in its debut in December, has gradually retreated and is now down more than 60% from its record high. MetaX and Biren have also fallen more than 40% from their respective peaks.<\/p>\n
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Still, investor appetite for the sector remains strong. China\u2019s AI spending boom is fuelling a wave of listings across the supply chain. Though smaller than industry leaders such as Huawei Technologies and Cambricon Technologies Corp, Enflame is among a handful of startups seeking to build China\u2019s domestic AI-chip industry. Known for its AI accelerators used in cloud and data-centre workloads, the company has benefited from growing demand for computing power.<\/p>\n
\u201cThe appeal of the company lies in its position as one of China\u2019s leading cloud AI chipmakers, as well as Tencent\u2019s dual role as both a key customer and major shareholder,\u201dHuajin Securities analysts including Li Hui wrote in a note. However, the company trails its peers in both revenue scale and gross margin, they added.<\/p>\n
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Tencent\u2019s importance to Enflame has grown rapidly. Sales to the tech giant accounted for 84% of total revenue in 2025, up from around 38% the previous year. Tencent\u2019s internet and cloud platforms serve as the key commercial base for Enflame\u2019s chips, which are used in large data centers, powering applications like chat bots, recommendation systems and generative AI.<\/p>\n
Rapid growth has yet to translate into profitability. Its net loss narrowed to 1.2 billion yuan in 2025, from 1.5 billion yuan the previous year, and Enflame forecast a loss of no more than 860 million yuan for the first nine months of 2026. Revenue, meanwhile, is expected to more than triple year-on-year to a range of 23 billion to 30 billion yuan in the period, after growing at a compound annual rate of more than 80% between 2023 and 2025.<\/p>\n
\u00a9 2026 Bloomberg<\/p>\n
#Tencentbacked #chipmaker #Enflame #debut #911m #IPO<\/p>\n","protected":false},"excerpt":{"rendered":"
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