China's Changxin Memory appoints CICC, China Securities for local IPO -sources

China Securities Co

25/05/2023 05:53

By Kane Wu and Scott Murdoch
       HONG KONG, May 25 (Reuters) - Chinese chip maker
Changxin Memory Technologies Inc (CXMT) has appointed investment
banks CICC  3908.HK  and China Securities  6066.HK  as sponsors
for its planned domestic initial public offering (IPO), two
people with knowledge of the matter said.
    CXMT, owned by state-backed parent Innotron Memory Co, is
China's leading maker of DRAM memory chips. Bloomberg reported
in April that CXMT's IPO would target a valuation of more than
$14.5 billion.
    The sources said a handful of other local investment banks
are expected to take more junior roles in the deal, and 
bookrunners for the offering had still to be finalized.
    CXMT, CICC and China Securities did not immediately respond
to a request for comment.
    Earlier this week a U.S. lawmaker asked the U.S. Commerce
Department to put trade curbs on CXMT after Beijing banned the
sale of some chips made by U.S.-based Micron Technology Inc
 MU.O .
    Analysts believe CXMT's chips are two to three generations
behind industry leaders Micron, Samsung and SK Hynix, but the
company is the domestic competitor most likely to benefit if
Micron is barred from China's massive chip market.
    The proposed IPO comes amid mounting diplomatic and trade
tensions between China and the United States.
    Washington has sought to curb exports of chip-making
equipment to China, requiring licenses for U.S. companies to
export advanced chips and chip-making equipment in a bid to slow
China's technological advances.
    CXMT has one fab in operation and is building two others.
According to research firm Trendforce, equipment export
restrictions imposed by the United States since October might
affect its expansion plans.
    CXMT will join a growing list of Chinese chipmakers looking
to sell shares publicly on the mainland.
    Chinese chipmaker Hua Hong Semiconductor Ltd  1347.HK  said
last week that it had received Shanghai Stock Exchange approval
for its planned $2.6 billion share listing, which is expected to
be one of the country's biggest this year.
    CXMT's listing plan appears to be in early stages as it has
yet to submit application to the country's securities regulator
for the so-called pre-IPO tutoring with banks, a search on China
Securities Regulatory Commission website showed.
    In a domestic listing, companies will formally file for a
float after advisers have instructed them on the IPO process.
    CXMT's listing, if materialises, will add to a busy year for
IPOs in China, as companies revive their plans after the world's
second-largest economy reopened after three years of
COVID-induced lockdown.

 (Reporting by Kane Wu in Hong Kong and Scott Murdoch in Sydney,
additional reporting by Samuel Shen and Josh Horwitz in Shanghai
and Roxanne Liu in Beijing; Editing by Sumeet Chatterjee & Simon
Cameron-Moore)
 ((kane.wu@thomsonreuters.com; +85228436590; Reuters Messaging:
kane.wu.thomsonreuters.com@reuters.net))