Shanghai Enflame Technology’s first trading session lifted its market capitalization to roughly CNY 185 billion on Friday, more than three times its IPO valuation. The Tencent-backed Chinese AI chip developer opened 188% above its offer price after securing CNY 6.12 billion through the listing.
The rally comes as investors back Chinese AI processor developers’ efforts to displace Nvidia in their domestic market. Enflame joins a wave of chip companies going public as Beijing promotes local suppliers in pursuit of technological self-sufficiency.
Enflame’s offering involved 43.04 million newly issued shares on the STAR Market, Shanghai’s technology-focused exchange. Those shares represent a tenth of the company’s post-IPO capital, while Wednesday’s filing placed its valuation at the offer price at approximately CNY 61.2 billion.
Retail subscriptions exceeded the original allocation by more than 6,000 times. Enflame subsequently increased the number of shares assigned to those investors.
Figures from IDC included in Enflame’s prospectus put international suppliers’ combined share of China’s AI accelerator market at almost 60% in 2025, with Nvidia leading that group. U.S. export restrictions and Beijing’s limited appetite for advanced chip imports have shut Nvidia out of exports to China’s data-center computing market.
Analysts project that Chinese semiconductor capital expenditure will reach $82 billion by 2030. That spending is expected to reflect additional memory and advanced-node capacity as generative AI expands.
Established in 2018, Enflame develops AI processors as China strengthens model-development efforts following substantial improvements in domestic developers’ capabilities. Its listing completes the public-market debuts of the four Chinese AI chipmakers collectively known as the “four little dragons.”
IPO funding is earmarked for development and commercialization of Enflame’s fifth- and sixth-generation processors. The company aims to bring their performance in line with premium offerings from overseas competitors.
Tencent’s role extends beyond financial backing. With 17.95% of the shares following the IPO, it remains Enflame’s biggest shareholder and was also its leading customer before the flotation. The prospectus attributed 83.79% of 2025 revenue to Tencent-related sales.
Despite revenue growth, Enflame remains unprofitable. It reported CNY 990.2 million in revenue for 2025, a 37% increase, and reduced its annual net loss from CNY 1.51 billion to CNY 1.16 billion.
For January through September 2026, management projects revenue between CNY 2.3 billion and CNY 3 billion, with a net loss ranging from CNY 700 million to CNY 860 million. The filing identifies 2026 or 2027 as the potential point for reaching break-even or profitability, subject to revenue expansion and margins.
Meta desc: Tencent-backed Enflame surged on its Shanghai debut after raising CNY 6.12 billion, amid demand for Chinese AI chips.
