Changxin Technology's ChiNext IPO Approved, Future Performance Volatility Risk and Billion-dollar Employee Incentives Face On-site Inquiry

According to Dynamically Observing Beating monitoring, on May 27, the Listing Review Committee of the Shanghai Stock Exchange held the 27th review meeting of 2026, and approved the IPO application of Changxin Technology Group Co., Ltd. (referred to as Changxin Technology) on the Sci-Tech Innovation Board. As the largest integrated circuit design and manufacturing company in China with the only mass production capacity of general-purpose DRAM, Changxin Technology's Sci-Tech Innovation Board IPO was approved, becoming the first project on the Sci-Tech Innovation Board to pass using the "pre-review" mechanism. However, during the review meeting, the Listing Committee raised key inquiries regarding the future performance volatility risk and the highly anticipated Phase II employee stock incentive plan.

During the on-site inquiry, the Listing Committee first focused on the risk of significant future performance volatility for Changxin Technology. The prospectus disclosed an extremely dramatic turnaround: due to heavy asset investment and the impact of the industry downturn, the company accumulated a net loss of over 28.2 billion yuan in 2023 and 2024, but successfully turned losses into profits in 2025. In the first quarter of 2026, driven by the surge in global computing power demand and the rise in DRAM contract prices, the company's quarterly revenue reached 50.8 billion yuan (a year-on-year increase of 719.13%), with a quarterly net profit rising to 33.012 billion yuan (a net profit attributable to the parent company of 24.762 billion yuan). Changxin Technology expects revenue in the first half of 2026 to reach 110 billion to 120 billion yuan, and net profit to reach 66 billion to 75 billion yuan. The SSE requested the issuer to explain whether there is a significant risk of future performance volatility based on the global competitive landscape, capacity expansion, new AI computing power technology routes, and downstream forecasts, and whether the risk disclosure is sufficient.

Secondly, the Listing Committee raised key inquiries regarding Changxin Technology's highly anticipated Phase II employee stock incentive plan. This equity incentive plan is known as the largest individual equity incentive plan in A-share history due to its significant scale. ZHU Yiming voluntarily pledged to distribute 50% of his personal holdings of Changxin Technology (approximately 768 million shares, with a market value of over 20 billion yuan based on valuation) to employees in 10 natural years after 36 months from the company's listing. To avoid diluting the interests of new and old shareholders after listing, the plan involves the founder directly transferring shares instead of issuing new shares. As part of this, ZHU Yiming made a long-term 20-year share lock-up commitment, namely not to transfer shares in the first 10 years after listing and to reduce his holdings by no more than 20% of the remaining locked shares at the end of the previous year each year in the next 10 years. The Listing Committee requested the company to explain whether the decision-making process complies with regulations and whether the accounting treatment of share payments complies with relevant enterprise accounting standards, considering the implementation background, internal and external decision-making processes, and adjustments.

In terms of product technology roadmap, Changxin Technology has completed the full intergenerational coverage from DDR4/LPDDR4X to DDR5/LPDDR5X. The high-margin DDR5 chips are expected to ramp up quickly in 2025. The showcased DDR5 chip has reached a speed of 8000 MT/s with a single 24Gb capacity, successfully entering the global high-end memory segment. In this IPO, Changxin Technology plans to raise 29.5 billion yuan to invest in memory wafer manufacturing line upgrades and transformation, as well as forward-looking technology research and development. Furthermore, the prospectus disclosed that the sales share of the top five customers has decreased to 39.85%, indicating a continued decrease in customer concentration. To address supply chain security review concerns, the prospectus has anonymized the names of the top five suppliers as "Supplier A," "Supplier B," using codes to maintain supply chain confidentiality.