Domestic AI Chip Maker Enflame Technology's STAR Market IPO Registration Takes Effect
Alina Collins
Enflame Technology's STAR Market IPO registration is now effective, clearing the process in under six months; yet with ¥4.3 billion in cumulative losses over three years and over 80% of revenue from a single shareholder-client — Tencent — its ability to sustain itself post-listing is the real test.
What does this company actually do?
Enflame builds cloud AI chips using a DSA — domain-specific architecture — approach: instead of making general-purpose GPUs, it designs chips purpose-built for AI workloads.
This means → it sidesteps head-on competition with Nvidia's GPGPU lineup, but pays for that with very high upfront R&D costs and the need to build its own software ecosystem from scratch.
With this listing, all four firms known as China's "GPU Four Dragons" — Moore Threads, Metax, Biren, and Enflame — have entered the capital-markets stage.
Revenue is growing — so why the massive losses?
Revenue rose from ¥301 million in 2023 to ¥990 million in 2025, a clear upward trend.
Yet net losses over the same period were ¥1.665 bn, ¥1.510 bn, and ¥1.164 bn — totaling more than ¥4.3 billion across three years.
In plain terms = R&D spending each year (¥1.229 bn, ¥1.312 bn, ¥1.135 bn) far exceeded the revenue the chips brought in — the R&D-to-revenue ratio stayed well above 100% throughout.
Over 80% of revenue from Tencent — how big is the risk?
Tencent is both Enflame's largest shareholder (combined stake: 20.26%) and its largest customer — accounting for 83.79% of 2025 sales.
This means → Tencent's purchasing cadence directly shapes Enflame's revenue curve, concentrating related-party risk to an unusual degree.
Cash flow is under equal pressure: operating cash flow was negative for three consecutive years; year-end 2025 inventory hit ¥863 million — nearly a full year's revenue — and the bad-debt provision ratio on receivables climbed to 24.76%.
After raising ¥6 billion, what is the real test?
The IPO targets ¥6 billion in proceeds, earmarked mainly for fifth- and sixth-generation AI chip R&D and commercialization.
A STAR Market listing solves the near-term funding gap, but the post-IPO agenda is clear: reduce single-client dependence on Tencent, turn cash flow positive, and prove the business model can sustain itself.
In plain terms = whether it *can* list is no longer the question — whether it can survive on its own is what the market will be watching next.
Content is for reference only, not financial advice.