Shares of Chinese semiconductor companies on the Shanghai Stock Exchange skyrocketed
Last week, China’s flagship semiconductor contract manufacturing company, SMIC, debuted on the STAR section of the Shanghai Stock Exchange, and the stock tripled on the first day of trading. Many Chinese issuers are able to surpass SMIC’s success, as Cambricon’s experience shows, which has more than quadrupled its shares in a day.
Cambricon Technologies, a developer of processors for artificial intelligence systems, was founded in the spring of 2016; during its existence, the company managed to attract about $ 200 million of capital. The debut of this company’s shares on the STAR platform was accompanied by a rise in quotations by 358%. Other semiconductor-related Chinese companies are also very successful on STAR, with Advanced Micro-Fabrication Equipment up 127% YTD, Will Semiconductor (+ 52%) and Gigadevice Semiconductor (+ 64%) ranked fourth and sixth in the CSI 300, respectively.
According to representatives of Mizuho Securities Asia, in the next five years, such dynamics in the price of shares of Chinese companies in the semiconductor sector will continue. At this stage of development, the Chinese industry will receive large-scale financial injections from both government funds and independent investors. From this point of view, the stock market of the PRC now lives with hopes for the success of the policy pursued by the country’s authorities to develop its own technologies and industries.
The separately existing Hong Kong market does not share this optimism. On the local stock exchange, SMIC shares fell by 25% on the first day of their appearance on the STAR platform, and are now trading at 33% below the values on July 13, when the record was updated. As a result, SMIC shares are three times cheaper here than in Shanghai. Local investors more soberly assess the development potential of the Chinese semiconductor industry.
