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China’s state banks set to profit from early CXMT equity bets amid national tech drive

CCB holds the largest CXMT stake among the five banks at 1.714 per cent while BoC owns the smallest position at 0.38 per cent

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A view of the CXMT factory on the outskirts of Beijing on Monday. Photo: AFP
Emma Main Shanghai

In line with Beijing’s goal of tech self sufficiency, Chinese investors have propelled ChangXin Memory Technologies (CXMT) to become the largest mainland-listed firm, with its market value topping 3 trillion yuan (US$443 billion).

This flood of capital lays bare an emerging shift in China’s equity investment landscape: many of the newcomers actually represent the country’s old money – state-owned banks.

CXMT is China’s largest maker of dynamic random-access memory (DRAM) chips, competing directly with South Korean chip giants Samsung Electronics and SK Hynix and US-based Micron Technology.

Industrial and Commercial Bank of China (ICBC), China Construction Bank (CCB), Agricultural Bank of China (ABC), Bank of China (BoC) and Bank of Communications, are among CXMT’s equity investors via their subsidiaries, according to the firm’s initial public offering prospectus.

In this photo illustration, a woman’s silhouette holds a smartphone with the China Construction Bank Corporation logo in the background. Photo: Shutterstock Images
In this photo illustration, a woman’s silhouette holds a smartphone with the China Construction Bank Corporation logo in the background. Photo: Shutterstock Images

Under mainland financial rules, commercial banks are prohibited from making direct investments and may only deploy equity capital through their in-house Asset Investment Companies (AICs).

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