Gross Margin Surpasses Samsung's, HBM Not Mentioned at All: CXMT IPO Details Breakdown
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Gross Margin Surpasses Samsung's, HBM Not Mentioned at All: CXMT IPO Details Breakdown
CXMT Sprints for STAR Market, DRAM Cycle Fountain Restarts.
Navigating Web3 tides with focused insightsBy: Chaoxiang Research
On July 9, Changxin Technology disclosed its prospectus, officially launching the STAR Market issuance: inquiry on July 13, subscription on July 16, stock code 688825. This issuance involves 6.688 billion new shares, accounting for 10% of the total share capital after issuance, with no transfer of old shares; if the over-allotment option is fully exercised, it can expand to 7.691 billion shares; half of the initial issuance volume was locked for strategic placement, among which the senior executives and core employees asset management plan subscribed for 10%, and CICC Wealth and CSC Financial Investment each followed up with 2% investment. Planning to raise 29.5 billion yuan, the scale is second only to SMIC, making it the second largest IPO in STAR Market history.
There is a set of data comparisons in the prospectus that reads like two different companies.
From 2023 to 2024, net profit attributable to the parent company was negative 16.34 billion and negative 7.145 billion respectively, with cumulative unrealized losses of 36.65 billion yuan by the end of 2025.
In Q1 2026, revenue was 50.8 billion yuan, a year-on-year increase of 719%, net profit was 33 billion yuan, calculated down to earning nearly 400 million a day, and net operating cash flow for the single quarter was 42.57 billion yuan.
From abyss to fountain, separated only by a cycle.
The Scale of the Cycle and a Pair of Scissors
DRAM, commonly known as memory, is the chip body of that "memory stick" in phones and computers.
CPU is the brain, hard drive is the warehouse, memory is the workstation, forgets upon power loss, but nothing runs without it.
After fighting to this day, Samsung, SK Hynix, and Micron eat up over 90% of the share. A detail of industry changeover hidden in the prospectus: By 2025 sales, SK Hynix at 34.48% surpassed Samsung's 33.96% for the first time, the leader has changed. Changxin ranked 4th globally, 1st in China with 7.67%, operating 3 12-inch wafer fabs in Hefei and Beijing, capacity utilization has climbed from 87.06% to 95.73%, near full production.
How cruel the cycle is, the prospectus cites Omdia data giving the scale: from 2015 to 2025, DRAM price high was 7.89 USD/GB, low point in the first half of 2023 was 1.78 USD/GB, the difference is nearly 80%.
On Changxin's financial statements, in 2023 DDR series unit price plummeted 46.61%, accrued inventory impairment loss of 11.5 billion yuan that year, exceeding the full year revenue of 9.1 billion yuan, inventory depreciation was more than sales revenue, this is what the cycle bottom looks like.
The top is a pair of opened scissors.
On the selling price side, in 2025 DDR series unit price rose 61%, LPDDR rose 24.46%; on the cost side, unit costs of two major product lines fell 26.26% and 22.85% respectively, even the procurement end is helping, silicon wafer procurement price index fell from base period 100 to 69.99, chemicals fell to 73.72. Selling price up, buying price down, cost amortized, three forces working simultaneously, gross margin pulled from negative 112.71% (pre-write-off basis) to 37.81%.
On a consolidated basis, Changxin's comprehensive gross margin in 2025 was 40.99%, exceeding Samsung's 39.38% and Micron's 39.79%, losing only to SK Hynix which reaped all the HBM benefits. A company that was deeply losing two years ago, gross margin has caught up with Samsung, this is the brightest data in the whole prospectus.
DDR4 Exits, HBM Absent
In Changxin's product structure, there are two important signals.
The first signal is written in an inconspicuous paragraph in Section 5: Since the end of 2024, Changxin's own DDR4 products have stopped production.
In the past half year, global DDR4 spot prices rose round after round, many analyses attributed the reason to "Changxin expanding DDR4 production impacting the market".
The facts given in the prospectus are exactly the opposite, it has already exited DDR4, betting all on DDR5 and LPDDR5/5X. The effect was immediate: DDR series revenue jumped from 3.17 billion yuan in 2024 to 19.53 billion yuan in 2025, 6.2 times in one year, proportion pulled from 13.26% to 31.87%, the driving force is the rapid volume release of high-price, high-gross-margin DDR5. In the revenue pool, LPDDR facing mobile phones still accounts for 66.43%, top five customers account for 68% of revenue, terminals are Alibaba Cloud, ByteDance, Tencent, Lenovo, Xiaomi, OPPO, vivo these manufacturers.
The second signal is the absence of a word: HBM did not appear anywhere in the full text.
Market rumors say Changxin has been advancing HBM R&D for a long time, but the declaration material mentions not a word about this, the 9 billion yuan forward-looking technology fundraising project is only described as "forward-looking technology research adapted for future advanced DRAM", construction cycle 2026 to 2028. The story of supplying high bandwidth memory to AI servers, at least in this legal document, Changxin did not claim a single word.
Incidentally, the prospectus's expression on AI is equally restrained, the original text admits the company's revenue proportion in AI-related fields during the reporting period is relatively low. What Changxin ate is indirect benefits: Overseas three giants shifted advanced capacity to HBM, general DRAM supply was withdrawn, prices passively raised, its products happened to stand on the gap.
An Equity Chart Easy to Overlook
An equity detail: among Changxin's 3 wafer fabs, 2 are not truly "held" by the group.
Changxin Xinqiao operating Xinqiao Fab, group direct holding only 30.68%; Changxin Jidian operating Beijing Fab, direct holding 31.72%. Both rely on concerted action agreements to gather enough 73% and 75% voting rights to achieve consolidation, Big Fund Phase II sits directly in the shareholder list of the two subsidiaries, holding 26.99% and 24.67% respectively.
This structure explains the most eye-catching gap on the statement: 2025 net profit 7.14 billion, attributable to parent company only 1.875 billion; Q1 2026 net profit 33 billion, attributable to parent 24.76 billion. The bulk of the difference belongs to minority shareholders of the two fabs. What IPO investors buy is parent-level attributable equity, watch the attributable line when looking at the income statement, don't be dazzled by the large number of net profit.
The Anchor of Issue Price, Hidden in the Arithmetic of Strategic Placement
Institutions' predictions for Changxin's market cap after listing range from 1 trillion to 4 trillion yuan, but the pricing anchor given by the prospectus itself is much calmer, can be seen by doing two simple divisions.
First: Proposed fundraising 29.5 billion yuan divided by 6.688 billion new shares, corresponds to issue price about 4.4 yuan/share.
Second cross-validation: Excluding employee asset management and sponsor follow-up investment, other strategic investors initially allocated about 2.408 billion shares, subscription amount upper limit 10.844 billion yuan, also corresponds to about 4.5 yuan/share.
Calculated based on 4.4 yuan and 66.88 billion total share capital, issue market cap falls in the 300 billion yuan neighborhood. Issue set at 300 billion, secondary market shouts 1 trillion starting, the more than two times gap in between, is all the space for long-short gaming after July 16, also the source of IPO subscription return expectation under the regulatory convention of "low price issuance, conceding benefits to the secondary market".
Primary market timeline supports this anchor: June 2025, Alibaba Cloud increased capital to Changxin at 2.6302 yuan/share by 6.1 billion yuan, only thirteen months from listing. On the founder side, Chairman Zhu Yiming was granted 1.536 billion incentive shares at 0.108 yuan/registered capital price, promised to distribute half of them to employees within ten years after listing, shares held by himself locked for 120 months from listing. Ten year lock, rare in A-shares. The largest shareholder Qinghui Jidian promised, if after listing net profit attributable to the parent company after deducting non-recurring gains and losses falls more than 50% compared to the year before listing, lock-up period automatically extends year by year.
Risks Are Also Written in the Statements
The production line supporting 40% gross margin is simultaneously the heaviest burden on the income statement.
By the end of 2025, fixed assets book value 183 billion yuan, accounting for 54% of total assets, only in 2025 accrued depreciation 24.68 billion yuan, 2.3 times that of 2023, will continue to increase after fundraising projects are completed. When prices go up depreciation is diluted by profit, when prices go down, it is the main source of huge losses like in 2023.
Another number worth watching is the production-sales rate: capacity utilization steps higher, but production-sales rate fell from 99.45% to 90.67%, nearly 10% of output in 2025 was not sold, became inventory. Hoarding goods in a price rise cycle is smart business, premise is prices continue to rise; the prospectus's risk chapter is unambiguous about this, directly writing that the significant performance growth in the first half of 2026 exists the risk of being unsustainable.
The industry's general expectation for this prosperity cycle is to continue until mid-2027.
Investors who press the subscription button on July 16, what they buy is an entry ticket exchanged for the ten-year long run of China's storage industry, what everyone is curious about is how long this storage super cycle can actually last, but right now, this trillion-valued giant ship has set sail.
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