China tech IPOs hit $3.1B as chip, AI firms rush to list

Key Takeaways

• Chinese tech firms raised $3.1 billion from onshore IPOs through June 2024, more than five times the year-earlier period
• Nearly 50 companies, including memory-chip maker CXMT planning a $4.4B listing, have filed for Shanghai and Shenzhen IPOs
• The surge provides long-awaited exit opportunities for private equity and venture capital investors stuck since 2024

China's onshore technology IPO market is heading for its best year since 2023. Tech companies have raised $3.1 billion from mainland listings through June 18, more than five times the same period last year, according to LSEG data. The driver: Beijing's campaign to build domestic chip and AI capabilities as US export restrictions bite harder.

Nearly 50 companies have filed for initial public offerings on the Shanghai and Shenzhen exchanges, with combined fundraising targets of at least 126.1 billion yuan ($18.7 billion), according to Reuters calculations. The applicants include robotics startups, semiconductor equipment makers, and AI firms. One standout: ChangXin Memory Technologies (CXMT), a memory-chip manufacturer planning a 29.5 billion yuan ($4.4 billion) Shanghai IPO. If completed, it would be the largest Chinese listing this year.

Why are regulators backing these listings now?

On June 17, Chinese regulators announced support for listings of startups in what they called "future industries," specifically quantum technology, nuclear fusion, and brain-computer interfaces. The Shanghai Stock Exchange also published rules to make it easier for large-language-model companies to list on the STAR Market, the tech-focused board designed to compete with Nasdaq.

The timing is deliberate. US export controls have blocked Chinese companies from buying advanced chips and chipmaking equipment, forcing Beijing to accelerate domestic production. Supporting IPOs serves two purposes: it channels capital into strategic industries and provides exit routes for the private equity and venture capital funds that seeded these companies years ago.

“The acceleration of technology IPOs has provided long-awaited exit opportunities for private equity and venture capital funds that have backed these companies.”

— Li He, co-head of Davis Polk's Asia (ex-Japan) practice

The numbers behind the rebound

Annual proceeds from tech IPOs in China collapsed from $15.7 billion in 2023 to just $2.7 billion in 2024, according to LSEG data. That drought sent some companies scrambling to Hong Kong for offshore capital. Now the trend is reversing.

The 2025 total already stands at $3.6 billion. That still trails the $6.6 billion raised by Chinese tech companies in Hong Kong this year, but the gap is narrowing. More telling: some Hong Kong-listed companies now want mainland listings too.

Zhipu AI, which raised HK$4.35 billion ($555 million) in a Hong Kong IPO in January, is now targeting a 15 billion yuan STAR Market listing. Baidu's chip unit Kunlunxin, awaiting regulatory approval for a $2 billion Hong Kong listing, is also planning a smaller domestic float, according to a person familiar with the matter.

What's attracting companies to mainland markets?

The China Securities Regulatory Commission (CSRC) announced earlier this month that it would support qualified Hong Kong-listed companies seeking mainland listings. That opens a two-way street: list in Hong Kong for international capital, then tap mainland investors for a second round.

“They would get access to a deep pool of capital, funding to grow businesses and great domestic branding.”

— Ho-Yin Lee, Asia-Pacific co-head of technology and communications at Citigroup

Kenny Ng, a strategist at China Everbright Securities International, said the CSRC support could broaden access and improve liquidity. "If companies from other regions listed in Hong Kong can be included in the future, it can provide investors with more diversified choices," Ng said.

Recent IPO performance is fueling the frenzy

Investor appetite for mainland tech IPOs has been ferocious. SJ Semiconductor Corp has surged more than eightfold from its IPO price. Semight Instruments has jumped nearly 28-fold. Those returns are pulling more companies toward domestic listings and making underwriters more willing to bring deals.

"The pickup in Chinese tech issuance is part of a broader global AI wave, with China and the US the two markets that set the tone," said James Wang, head of Asia ex-Japan equity capital markets at Goldman Sachs.

What this means for the US-China tech split

The IPO surge marks a clear policy response to American pressure. By directing capital into domestic chip and AI companies, Beijing is betting it can build an independent supply chain. The strategy carries risks. Many of these companies are unproven, valuations are frothy, and technological catch-up takes years, not quarters.

But for now, the market is buying the story. Mainland investors, locked out of US tech stocks and wary of property, see AI and chips as the growth sectors of the decade. Regulators are smoothing the path. And companies that spent years waiting for the IPO window to reopen are rushing through.

Frequently Asked Questions

How much have Chinese tech companies raised in IPOs this year?

Chinese technology companies have raised $3.1 billion from onshore stock market listings through June 18, 2024, more than five times the amount raised in the same period last year.

What is the largest pending tech IPO in China?

ChangXin Memory Technologies (CXMT) is planning a 29.5 billion yuan ($4.4 billion) Shanghai IPO, which would be the largest Chinese listing this year if completed.

Why are Chinese tech companies listing domestically instead of Hong Kong?

Mainland listings offer access to a larger pool of domestic capital, stronger local branding, and regulatory support from Beijing, which is pushing tech self-reliance. Some companies are pursuing dual listings in both markets.

What is the STAR Market?

The STAR Market is a tech-focused board on the Shanghai Stock Exchange designed to support innovative companies, similar to Nasdaq. It has looser profitability requirements and is now being opened to large-language-model AI companies.

How have recent Chinese tech IPOs performed?

Recent IPOs have seen extraordinary gains. SJ Semiconductor Corp has risen more than eightfold from its IPO price, while Semight Instruments has jumped nearly 28-fold.

Source: Tech-Economic Times / ET