Credit: Tencent Shares in Shanghai Enflame Technology closed 179% above their offer price on their first day of trading on Shanghai’s Star Market on Friday. The Tencent-backed AI chipmaker had raised about 6.12bn yuan ($911m) in its initial public offering, Bloomberg reported. The stock opened at 410 yuan, against an IPO price of 142.18 yuan. It rose as much as 234% to 475 yuan during the day before closing at 397 yuan, Ann Cao reported for the South China Morning Post.
That gave Enflame a market value of 170.9bn yuan ($25.5bn), according to the SCMP. Reports published during the session gave other figures: CNBC put the gain at 206%, and Business Insider at about 200%. The wider market fell. The Star 50 Index dropped 1% on Friday and the benchmark CSI 300 Index 0.8%, the SCMP reported.
Demand for the shares Retail investors bid for 4,073 times the shares available to them, according to Enflame’s filing to the exchange, cited by the SCMP. About 7 million online investors ordered 42.1bn shares. Individual investors got an allocation rate of 0.025%, one of the lowest in mainland China this year. The robot maker Unitree had a rate of 0.018%, the SCMP reported.
CNBC gave a higher figure. It reported that the retail offering drew orders for more than 6,000 times the shares available, before Enflame reallocated more stock to that group. Enflame sold 43 million shares in the IPO, according to Bloomberg. It won approval for the listing in June.
Who runs Enflame Enflame was founded in Shanghai in 2018 and makes AI chips for training and inference. It has fewer than 900 employees and has never turned a profit, Diana Li reported for Bloomberg. The company takes its name from a Chinese mythical figure credited with inventing fire. Its co-founders, Zhao Lidong and Zhang Yalin, both worked at AMD.
Zhao spent two decades in Silicon Valley and was a vice president at the state-backed Tsinghua Unigroup. Zhang rose through AMD’s Shanghai research centre to run its core chip development, according to Bloomberg. From the start, the founders chose not to compete directly with Nvidia’s general-purpose graphics processors. They built a different type of chip, designed to work outside Nvidia’s ecosystem, Bloomberg reported.
The share rise brought each founder’s fortune to $2.5bn, according to Bloomberg. Both are bound by long lockup periods and must meet certain targets before they can sell. Enflame did not respond to Bloomberg’s requests for comment. Tencent and the numbers Tencent holds a 20% stake in Enflame and is also its largest customer.
Sales to Tencent made up 84% of Enflame’s revenue in 2025, up from about 38% a year earlier, according to Bloomberg. The chips run in large data centres, powering chatbots, recommendation systems and generative AI. Revenue rose to 990m yuan in 2025, from 722m yuan in 2024, CNBC reported. Enflame posted a net loss of 1.16bn yuan for 2025, narrower than the 1.5bn yuan loss the year before, according to Bloomberg.
The company forecast a loss of no more than 860m yuan for the first nine months of 2026. Bloomberg reported that revenue for the period is expected to more than triple from a year earlier. Enflame expects to break even in 2026 or 2027, Business Insider reported. Enflame plans to spend the proceeds on developing its fifth- and sixth-generation AI chips, according to CNBC.
It wants them to match the performance of high-end products from international rivals. What analysts said “The appeal of the company lies in its position as one of China’s leading cloud AI chipmakers, as well as Tencent’s dual role as both a key customer and major shareholder,” analysts at Huajin Securities, including Li Hui, wrote in a note, Bloomberg reported. They added that Enflame trails its peers in revenue scale and gross margin. Paul Triolo, a partner and head of technology at the advisory firm DGA, called Enflame’s choice of alternative chips a “high-risk form of strategic independence”.
He told Bloomberg that the approach “may be good for Tencent and municipal data centers”. It could be “less attractive in the open developer market”, he said. Where its chips are made Enflame still relies on overseas manufacturers to produce its advanced chips, Qianer Liu reported for The Information. In late 2023, geopolitical tensions forced it to downgrade some chip designs to keep access to TSMC’s factories, according to Bloomberg.
To bring in revenue, it has relied on Chinese state-backed computing projects in cities such as Wuxi and Qingyang. The other ‘little dragons’ Enflame is the last of China’s “four little dragons” of AI chipmaking to list. The other three are Moore Threads, MetaX and Biren. MetaX soared nearly 700% on its first day of trading in December, CNBC reported.
Moore Threads rose 425% on its debut the same month, according to Bloomberg, and has since planned a Hong Kong listing. Biren jumped 76% on its listing in January. CNBC and Bloomberg described those shares differently. According to CNBC, all three have remained above their listing prices.
Bloomberg reported that they have all fallen back substantially. Moore Threads is down more than 60% from its record high, and MetaX and Biren more than 40% from their peaks, according to Bloomberg. Other Chinese chip listings have also surged on debut. In July, the memory maker CXMT rose nearly 466% on its Shanghai debut, CNBC reported.
China’s push to replace Nvidia International chipmakers led by Nvidia held nearly 60% of China’s AI accelerator market in 2025. CNBC cited that IDC figure from Enflame’s prospectus. US export controls and Beijing’s lukewarm interest in importing advanced chips have shut off Nvidia’s exports to China’s data centre market, according to CNBC. Z.ai said its GLM-5.3-Flash model runs entirely on China-made chips.
Analysts said it likely used chips from Huawei, Enflame and other local companies, CNBC reported. China is “still at a very early stage of a multi-year IPO upcycle”, Morgan Stanley analysts wrote in a note on 28 August, Business Insider reported. Many of the new listings are developing technologies China sees as strategically important, though many are not yet profitable, the bank said. “Capital markets are therefore critical to help them scale up,” its analysts wrote. Goldman Sachs expects China’s semiconductor capital spending to reach $82bn by 2030, according to CNBC.
