After the IPO of ChangXin Memory Technologies, can the Hefei model continue to be replicated?

According to an announcement by the Shanghai Stock Exchange on May 20, the IPO of Changxin Technology, a major domestic DRAM (Dynamic Random Access Memory) manufacturer, will be reviewed on May 27. For this IPO, Changxin Technology plans to raise a total of 29.5 billion yuan, which will be used for the "Technical Upgrading and Transformation Project of Memory Wafer Manufacturing Mass Production Line", the "DRAM Memory Technology Upgrade Project", and the "Research and Development Project of Forward - looking Technologies for Dynamic Random Access Memory".

What's even more eye - catching is the early arrival of Changxin Technology's profit turning point.

According to the updated prospectus data of Changxin Technology on May 17, the revenue in 2025 was 61.799 billion yuan, a year - on - year increase of 155.6%, and the company achieved profitability. When the prospectus was released in December last year, Changxin Technology expected that the company could achieve profitability in 2026 or 2027. In 2023 and 2024, the company accumulated a loss of 23.48 billion yuan in two years.

The primary driving force behind the explosive growth of performance is the demand from AI. The company said that DRAM is the core hub of the artificial intelligence computing power system. With the rapid development of artificial intelligence, the investment in relevant infrastructure has grown at a high speed, and the market demand for DRAM has shown an explosive growth, which is one of the main reasons for the company's performance growth since the second half of 2025.

However, the story of Changxin Technology is far more than just technological breakthroughs and market demand. Behind it, the long - term bet of the Hefei local government is also crucial.

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According to the prospectus, the shareholders of Changxin Technology who directly hold more than 5% of the company's shares are Hefei Qinghui Jidian (21.67%), Changxin Integration (11.71%), the Second Phase of the Big Fund (8.73%), Hefei Jixin (8.37%), and Anhui Provincial Investment (7.91%). Among them, behind Qinghui Jidian are the state - owned assets of Hefei Economic Development Zone and the Hefei Industrial Investment system. Changxin Integration is 100% controlled by the Hefei State - owned Assets Supervision and Administration Commission through Hefei Industrial Investment, and the actual controller of Anhui Provincial Investment is the Anhui Provincial State - owned Assets Supervision and Administration Commission.

Wang Han, a partner of Shanghai Puchang Equity Investment Fund Management Co., Ltd., who has long been concerned about the automotive industry chain and is deeply involved in the docking of government - guided funds in many places, believes that "in terms of local investment promotion, Hefei is indeed one of the earliest ones to do so."

Public information shows that in 2016, Zhu Yiming of GigaDevice Semiconductor reached an agreement with the Hefei government, and then Changxin Technology was established. In January 2018, the first - phase plant of Changxin Technology's 12 - inch wafer memory project was completed. In October 2017, GigaDevice Semiconductor signed a five - year cooperation agreement with Hefei Industrial Investment, and Hefei Industrial Investment invested about 14.4 billion yuan. In 2018, Zhu Yiming resigned from the position of general manager of GigaDevice Semiconductor and became the CEO of Changxin Storage instead.

In September 2019, Changxin Technology officially announced the mass production of the first batch of DDR4 memory chips with a 19 - nanometer (nm) process, becoming the fourth company in the world to master DRAM technology below 20nm.

At that time, the DRAM market was firmly controlled by the three giants, Samsung, SK Hynix, and Micron. The technical barriers were high, the investment was huge, and the cycle fluctuations were severe. In Wang Han's view, this was not a generally recognized good track. As a central city, Hefei dared to place a bet, with strong decision - making and market control abilities, which "is a rather exciting thing".

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Hefei's boldness has been verified more than once. In 2020, Hefei made a strategic investment of 7 billion yuan in NIO. Before that, NIO had talked with 18 local governments, but all ended without results. An industry insider revealed that "Li Bin didn't have high hopes at that time, but found that Hefei's support was particularly strong, and they hit it off immediately." With the help of NIO, Hefei also successfully established an industrial chain for new energy vehicles.

So, can the Hefei model be replicated? Wang Han believes that in theory, it is replicable, as local governments all want to promote investment promotion, achieve asset appreciation, and industrial chain agglomeration. However, in practice, there are often many variables. Some localities are constrained by historical burdens such as real estate and urban investment debt repayment, and are unable to make large - scale and long - term investments like Hefei; others miss out on "hidden champions" and regret it because the local relevant leaders lack an industrial background.

"This is a process of game - playing between the two sides," Wang Han told Jiemian News. Enterprises hope that local governments can give one - time support in terms of investment and production line establishment, and reduce restrictions and gambling clauses. But for local governments, to control risks, they often require staged implementation, set up repurchase or gambling clauses, and sometimes fail to fulfill subsequent commitments after the investment promotion task is completed.

According to Wang Han's observation, in recent years, local government - guided funds have become more and more important in corporate financing, but the operation scale is tightening. "In the general direction, it is more open, but in small - scale operations, it has become more cautious." Around 2021 and 2022, "the era when companies could get money just by registering has ended."

This requires enterprises to have real needs and production - implementation capabilities. Wang Han believes that currently, projects that are suitable for investment promotion and establishment should be those with real production - capacity establishment needs and driven by market rigid demand. On this basis, the government solves the problems of funds, employment, and supporting facilities, and the enterprise realizes expansion. This is a win - win situation for both the enterprise and the government.

Wang Han believes that in the short term, industries such as AI infrastructure, computing power and underlying applications, and commercial aerospace are industries with real implementation value at present. "But if an enterprise just wants to raise funds and what it does is actually a packaged project, then I think it will be a lose - lose situation."

According to a report by National Business Daily, some forecasts indicate that after Changxin Technology goes public, calculated according to the shareholding ratio of Hefei's state - owned assets system, if the market sentiment is relatively aggressive and a price - to - earnings ratio (PE) of 25 to 30 times is given, the book assets of Hefei's state - owned assets are even expected to exceed one trillion yuan.

Where will the next "Changxin" be born? Wang Han believes that this requires not only the courage to place bets in the non - consensus stage but also the strategic patience to go through the cycle.

This article is from "Jiemian News", author: Jin Jing, editor: Wen Shuqi, published by 36Kr with authorization.