SMIC shares surge 202% on STAR Market debut

SMIC’s share price surged 202 percent on Thursday on its first trading day in the Shanghai STAR Market, making it biggest company by market value on the innovation board. 

Semiconductor Manufacturing International Corp, which is also listed in Hong Kong, is the biggest chipmaker on the Chinese mainland.  

Its domestic listing is expected to boost development of the Chinese semiconductor industry and is the latest example of China attracting more high-tech firms to list in the domestic capital market. 

SMIC closed at 82.92 yuan (US$11.85) in the STAR Market, with an intraday high of 95 yuan. Its market value hit 613.7 billion yuan, with Kingsoft Office following at 172.8 billion yuan. 

“The return of SMIC shows flexibility and innovation of the domestic capital market, as well as the support for key core technological innovations and the real economy,” said Zhou Zixue, SMIC’s chairman. 

SMIC’s listing created a number of firsts in the Chinese capital market, in its rapid listing process, IPO value, market value and dual listing structure with a domestic listing of a Hong Kong-listed red-chip firm, industry insiders said.

SMIC’s listing “creates a demonstration halo for all industry players,” said Amos Fang, principal analyst at Cinda Securities’ technology research center. “High-tech firms with core technologies are welcomed to list here at home and enjoy high valuations.” 

The funds raised will be used on SMIC’s latest 12-inch wafer plants and technology research, the Shanghai-based chipmaker said.

SMIC raised 46.29 billion yuan in its initial public offering in the STAR Market, more than double its initial target and a record high in IPO value for the board.

The IPO will help SMIC narrow the gap between market leader Taiwan Semiconductor Manufacturing Co. It will also support China’s long term strategy to develop a national semiconductor industry, analysts said.

SMIC dropped 25.2 percent in Hong Kong to close at HK$28.75 (US$3.69), compared with the Hang Seng Index drop of 2 percent on Thursday. 

The shares have already more than doubled this year with January’s price around HK$12.