Chinese AI start-up Cambricon to raise US$367.7 million through IPO on Shanghai’s Star Market
- Cambricon, one of China’s most valuable AI chip start-ups, has set a listing price of 64.39 yuan per share on Shanghai’s Star Market
- It is offering 40.1 million new shares through the listing, or about 10 per cent of its total shares after the IPO
Cambricon’s IPO values the company at 25.7 billion yuan, or 58.03 times its 2019 earnings, above the average price-to-sales ratio of 34.54 for five of its China-listed peers, according to the prospectus.
The Beijing-based company did not immediately respond to a request for comment.
Launched in July 2019 as a way for China to offer fast-track financing to promising technology start-ups, tech-heavy Star Market has attracted more than 100 companies since its launch, according to big four firm PwC. It has seen 46 listings, bringing in 50.8 billion yuan in funding, in the first half of the year.
However, even with the listing, it is “still not clear” how Cambricon will break even, said EqualOcean analyst Ivan Platonov, who cited competitors downstream, the company’s “rather bleak client pool” and the “fading interest in AI within the application layer globally”.
“It seems that, under the current situation, Cambricon's future will be mainly shaped by its business development power, not by R&D capabilities,” he added.