Super Storage Week, what is the basis for its valuation?
This week can also be called the "Super Memory Week". On Monday, Changxin Memory Technologies went public and accepted public market pricing; on Wednesday and Thursday, SK Hynix and Samsung Electronics successively released their Q2 financial reports, disclosing data on profits, inventories and capital expenditures.
On July 27, Changxin Memory Technologies (688825.SH) started trading after its listing. Some investors made a fortune, some were confused, some stared blankly, and some sighed with regret right after selling their shares. On that day, the share price of Changxin Memory Technologies quickly dropped from the opening price of 49.50 yuan to 38.11 yuan, then surged to 55.03 yuan, and finally settled near 49 yuan.
On the same day, three markets of the same industry in Shanghai, Seoul and New York were calculating different futures. Among them, the Shanghai Composite Index rose by 1.15%, the Shenzhen Component Index rose by 2.72%, the STAR 50 Index rose by 1.16%, and the semiconductor materials and equipment index rose by 4.21%; the Korea Composite Stock Price Index recorded a more tortuous "V-shaped" trend; US stocks opened higher and moved lower, the S&P 500 and the Nasdaq retreated after opening higher, almost erasing their gains, while the reversal of chip stocks was more drastic, with the PHLX Semiconductor Index turning from an earlier 1.1% increase to a 2.23% decline at close.
Did Changxin Memory Technologies shake the global chip market? At least starting from this day, China's memory industry has transformed from a follower of the global cycle to a variable that cannot be ignored when the global market revalues the sector.
This week can also be called the "Super Memory Week". On Monday, Changxin Memory Technologies went public and accepted public market pricing; on Wednesday and Thursday, SK Hynix and Samsung Electronics successively released their Q2 financial reports, disclosing data on profits, inventories and capital expenditures. Global capital continues to face U.S. long-term Treasury yields of over 5%.
How much is Changxin Memory Technologies actually worth, and what will the financial reports of the two South Korean semiconductor companies "reveal"?
I
"I followed the regular new share subscription strategy and sold all my shares on the first day of listing", "I added positions while trembling with fear", "I was too overly panicked"...
Investors who won the new share allotment held their breath and stared at the market: some chose to sell, some chose to hold, and some chose to chase higher positions. They are not completely rational, nor are they completely irrational, and many of them are very determined. These sentiments are all reflected on the same candlestick with a long upper shadow and a long lower shadow.
Around 9:44 on July 27, the share price of Changxin Memory Technologies dropped to the lowest point of 38.11 yuan. Only more than ten minutes after the opening, about 650 billion yuan of funds had completed handover. Among them, medium and small orders recorded a cumulative net sell of about 378 billion yuan, while extra-large and large orders took over the shares at an almost equal scale.
The 66.4% turnover rate means that among the 4.503 billion tradable shares on the first day, about 2.99 billion shares have completed the transfer from the original allottees to new buyers.
Millions of allotted shares were cashed out at the same time, and sell orders broke through the buy orders level by level; when the price fell back to around 38 yuan, the take-up of large funds finally overwhelmed the new selling pressure, and the share price rebounded to above 46 yuan within a few minutes.
The 38.11 yuan price was not calculated by a valuation model. It is more like the price left by the collision of two different time scales: one side was eager to cash out several times of book gains, while the other side was willing to pay for the future of China's DRAM (Dynamic Random Access Memory) industry.
Logically, the closing market value of Changxin Memory Technologies on the first day of listing is about 2.1 trillion yuan higher than the fundamental central value of the model. The market did not wait for HBM (High Bandwidth Memory), yield rate, production capacity and profits to be realized one by one, but priced part of the industry's future into the current price in advance.
Therefore, whether 49 yuan is expensive or not depends on whether Changxin Memory Technologies can gradually turn this "option value" of more than 2 trillion yuan into production capacity, technology, market share and profits that can survive market cycles in the future.
"Changxin Memory Technologies is the first world-class technology company in the true sense of the A-share market, and it is the valuation anchor for large technology sectors on A shares. Going forward, the trend of Changxin Memory Technologies will still greatly exceed market expectations. Nomura Securities has given Changxin Memory Technologies a long-term target price of 112 yuan. Goldman Sachs mentioned in its conference call that the HBM progress of Changxin Memory Technologies may far exceed expectations. This is a new change in the valuation logic." said a senior private equity practitioner. He tried to add positions at the 40 yuan price point, but failed to buy shares due to poor system network conditions.
II
What exactly do investors get for 49 yuan? Is it the current profit of Changxin, the prosperity of the DRAM cycle, or the possibility of China's memory industry in the next ten years?
On Monday, the A-share market first gave a price: 49 yuan, corresponding to a market value of about 3.28 trillion yuan. But this is not the final answer, it is just the first quotation.
In the following Wednesday and Thursday, SK Hynix's financial report will tell the market how much profit AI memory can actually make; Samsung Electronics' financial report will answer the market what valuation scale, technology and capital expenditures deserve.
Judging from profits alone, the market is unlikely to be disappointed. Samsung Electronics has forecast that its Q2 sales will be about 171 trillion won and operating profit will be about 89.4 trillion won, an increase of more than 18 times year on year; South Korea's semiconductor exports in the first 20 days of July increased by 180.6% year on year, which also provided solid evidence for strong demand.
However, the market is no longer satisfied with "how much profit was made in Q2". The market will ask about DRAM and NAND (flash memory) contract prices in Q3, customer certification and yield of HBM4, whether inventories will shift back to restocking, the scale of new production capacity from 2027 to 2028, and whether capital expenditures can eventually be converted into free cash flow.
Changxin Memory Technologies will also be included in this supply table. Domestically, capacity expansion represents the progress of domestic substitution; in the global market, it means that a fourth DRAM manufacturer besides Samsung Electronics, SK Hynix and Micron Technology is forming large-scale production. The stronger the demand, the more manufacturers want to expand production; the faster the production expansion, the more the market will worry about the next round of supply in advance. This is the difficulty of cyclical industries: today's shortage is often breeding tomorrow's oversupply. This is exactly why the financial reports of the two South Korean companies will become the valuation reference for Changxin Memory Technologies.
Industrial operations are calculated in years: orders, plant construction, technology iteration and customer certification all take time and cannot be rushed; financial statements are calculated in quarters: revenue, gross profit margin, depreciation and capital expenditures are settled quarter by quarter; while the capital account is calculated in days: long-term bond yields, fund redemptions and foreign capital flows are re-settled every day.
The intraday reversal of US-listed memory stocks on July 27 raises another question: Is Changxin a beneficiary of the global industry boom, or a participant that may change the future supply pattern?
In less than 10 years, Changxin Memory Technologies has grown into the fourth large-scale DRAM manufacturer in the global market, and its market value has entered the ranks of global semiconductor giants. However, there is still a gap between it and Samsung Electronics, SK Hynix and Micron Technology in terms of profit scale, advanced products, customer structure and technology ecosystem.
Nevertheless, no one could have imagined that Changxin Memory Technologies, which only unveiled its 8Gb DDR4 product at the World Manufacturing Conference in September 2019 and received its first order in November of the same year, took less than 7 years to become the company with the largest market value on the A-share market. As early as at the 2022 World Integrated Circuit Conference and the 2nd IC China Expo, Zhu Yiming, Chairman and CEO of Changxin Memory Technologies, emphasized in his speech titled "Challenges of the Globalized Integrated Circuit Supply Chain under the New Situation" that the globalization of the industrial chain is the historical trend, and win-win results can only be achieved through cooperation.
Facing public market pricing, Changxin still needs to pass many tests: market sentiment, profit performance, industry cycles, technological breakthroughs, and global competition.
In any case, July 27, 2026 belongs to the STAR Market, which has been in operation for 7 years.
Peng Yigang, Deputy Director of the Market Development Department of the Shanghai Stock Exchange, talked about the "STAR Market" at a forum during the World Artificial Intelligence Conference (WAIC): Enterprises are stars, and the STAR Market itself is also a new star in the capital market. He invited all attendees to "work together to pursue the vast sea of stars".
At the close of trading on July 27, the book value of shares held by Zhu Yiming exceeded 78 billion yuan; across the ocean, Micron Technology, SanDisk and a number of semiconductor stocks were sold off, and the possibility of China's memory industry expanding production and domestic immersion DUV (Deep Ultraviolet) lithography machines was quickly priced into global chip stocks. The Chinese market is adding a premium for the scarcity of Changxin Memory Technologies, while overseas markets have begun to revalue it for the potential competition it may bring.
On the evening of July 27, what was Zhu Yiming thinking about? He might take a look at that long K line. But more urgent than the closing price of 49 yuan is how to turn the 57.9 billion yuan of raised funds (which can reach 66.6 billion yuan after the full exercise of the green shoe option) into equipment, yield rate, production capacity and next-generation products, and whether the future that the market has paid in advance can be realized quarter by quarter in subsequent financial reports.
This article is from the WeChat official account "The Economic Observer", written by Ouyang Xiaohong, and published with authorization from 36Kr.