(Aug19): Yangtze Memory Technologies Co moved closer to an initial public offering in China, following in the footsteps of rival CXMT Corp’s near-record share sale.

The company known as YMTC completed its pre-listing tutoring work and was found to have the corporate governance structure, accounting foundation and internal control systems expected of a listed company, according to a report published on the China Securities Regulatory Commission’s website.

YMTC is now on track to follow CXMT’s fundraising example as China’s homegrown chip giants look to tap capital markets to expand capacity and bolster Beijing’s drive for tech self-sufficiency. CXMT last month raised 66.6 billion yuan (RM40.14 billion), the second-biggest mainland debut ever, and became the country’s largest listed company as its shares surged out of the gate.

The news was partly blamed for a selloff in Chinese technology stocks, as large IPOs are typically seen as draining market liquidity and weighing on investor sentiment. The STAR 50 Index plunged 6.9% on Wednesday, its biggest drop in a month.

“The global weakness in tech stocks and the pace of IPOs — with news of YMTC coming on the heels of Unitree — also have something to do with it, though they are not the core factors,” said Niu Chunbao, fund manager at Shanghai Wanji Asset Management Co.

YMTC and CXMT are central to Beijing’s strategic priorities as artificial intelligence demand drives a global memory shortage and soaring profits across the industry. Their importance has increased under US export curbs, fuelling investor bets on China’s domestic chip supply chain and sending related stocks sharply higher.

YMTC has edged out Japan’s Kioxia Holdings Corp to become the world’s third-biggest provider of flash memory shipments during the June quarter, a sign that Chinese chipmakers are benefiting from AI-driven shortages. It also narrowed its gap with Samsung Electronics Co and SK Hynix Inc in terms of global NAND bit shipment volume.

Citic Securities and CSC Financial handled YMTC’s tutoring process.

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