Enflame Technology IPO Priced at 142.18 Yuan, Aiming to Raise 6.1 Billion Yuan
nashnova research
Enflame Technology priced its STAR Market IPO at 142.18 yuan per share, targeting roughly 6.1 billion yuan (~$908 million) — the most conservative valuation among China's four leading AI-chip startups, yet Tencent's 84% revenue share remains the biggest overhang.
Is this pricing expensive or cheap?
Enflame will issue about 43 million shares at 142.18 yuan each, raising 6.1 billion yuan (~$908 million) — slightly above the original 6-billion-yuan target.
That values the company at roughly 61.8× its 2025 revenue. This means → the market is pricing future growth, not current profits.
Peers Moore Threads and Metax both trade above 160× sales; Nvidia sits at about 25.4×. In plain terms = Enflame is far cheaper than domestic peers but more than double Nvidia's multiple — because Nvidia already turns a profit, and Enflame does not.
Tencent accounts for 84% of revenue — what does that mean?
Tencent holds roughly 20% of Enflame, making it both the largest shareholder and the largest customer.
In 2025, Tencent purchases made up 84% of Enflame's total revenue, up sharply from about 38% the year before. This means → revenue growth is tightly tied to Tencent's purchasing appetite; any budget shift there would hit Enflame hard.
This reflects a common dilemma for China's AI-chip startups: chasing Nvidia on technology while depending on a single mega-client for commercial survival.
Revenue is surging — but when will profits arrive?
Revenue grew at a compound rate above 80% from 2023 to 2025. The company forecasts 10.6–11.5 billion yuan in first-half 2026 revenue, more than triple the year-ago period.
Losses persist: a 1.2-billion-yuan net loss in 2025 (narrowed from 1.5 billion the year before), with an estimated ~600 million yuan loss in first-half 2026.
In plain terms = sales are doubling and losses are shrinking, but the break-even point has not arrived — investors are paying for the expectation of future profitability, not today's bottom line.
Where will the money go?
Proceeds will fund mass production of fifth- and sixth-generation AI chips and R&D for advanced AI hardware and software.
The stated goal is to help China reduce its reliance on Nvidia's AI chips. This means → the capital is essentially a bet on whether the next-generation product can compete — it will not convert into near-term profit.
Last of the "Big Four" to list — how much enthusiasm is left?
Enflame is the last of China's four leading AI-chip startups — Moore Threads, Biren Technology, Metax, and Enflame — to reach the public market.
Moore Threads surged 425% on its first trading day, building significant sector hype.
The key test: whether Enflame's relatively conservative pricing can sustain investor interest when the path to profitability remains unproven — that is the post-listing verdict the market will deliver.
市场有风险，内容仅供研究参考，不构成投资建议。