Equity Long-Short

Mo Aziz

Equity Capital Markets

Shanghai Enflame Technology / Equity Capital Markets

<ul>
<li>Enflame's Tencent contract is real — 64,890 cards in FY25, H1-26 revenue above FY25 — but 84% of sales, a 32% gross margin and one customer set the price.</li>
<li>On EV/Sales the stock is mid-pack at 26x FY27E; on EV/gross profit it is 83x, the most expensive of six listed China accelerator names.</li>
<li>We initiate BEARISH, 12-month Fair Value CNY310 (18x FY27E EV/Sales plus net cash), 30% below spot; the 4% float unlocks in June and September 2027.</li>
</ul>


Enflame's Tencent contract is real — 64,890 cards in FY25, H1-26 revenue above FY25 — but 84% of sales, a 32% gross margin and one customer set the price.
On EV/Sales the stock is mid-pack at 26x FY27E; on EV/gross profit it is 83x, the most expensive of six listed China accelerator names.
We initiate BEARISH, 12-month Fair Value CNY310 (18x FY27E EV/Sales plus net cash), 30% below spot; the 4% float unlocks in June and September 2027.


Enflame Tech (688801 CH): One Customer, One Stack, 4% Float — Sell the Squeeze, Buy the Unlock

HK/China Equity Long-Short

Osbert Tang, CFA

<ul>
<li>
<a href="https://www.smartkarma.com/entities/shanghai-enflame-technology-co-ltd" target="_blank" data-smartkarma-citation="entities:50657:1" rel="noopener">Shanghai Enflame Technology (ENFLAME CH)</a>, one of the "Four Domestic GPU Little Dragons", has just been approved by the CSRC to list on the STAR market, aiming to raise Rmb6bn.</li>
<li>The company's strengths lie in its comprehensive product portfolio, differentiated architecture (DSA vs. GPGPU), strong shareholder backing, and position for China's AI self-sufficiency.</li>
<li>At 27.1x P/S for FY26 (10% share capital enlargement), Enflame is inexpensive relative to A-share peers, <a href="https://www.smartkarma.com/entities/shanghai-biren-technology-co-ltd-class-h" target="_blank" data-smartkarma-citation="entities:39934:1" rel="noopener">Biren Technology (6082 HK)</a> and <a href="https://www.smartkarma.com/entities/shanghai-iluvatar-corex-semiconductor-co-ltd-class-h" target="_blank" data-smartkarma-citation="entities:46193:1" rel="noopener">Iluvatar CoreX (9903 HK)</a>. </li>
</ul>



Shanghai Enflame Technology (ENFLAME CH), one of the "Four Domestic GPU Little Dragons", has just been approved by the CSRC to list on the STAR market, aiming to raise Rmb6bn.
The company's strengths lie in its comprehensive product portfolio, differentiated architecture (DSA vs. GPGPU), strong shareholder backing, and position for China's AI self-sufficiency.
At 27.1x P/S for FY26 (10% share capital enlargement), Enflame is inexpensive relative to A-share peers, Biren Technology (6082 HK) and Iluvatar CoreX (9903 HK). 


Shanghai Enflame (燧原科技) Pre-IPO: Key Investment Thesis

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Cross Asset Strategy

<ul><li>In Depth: China’s Autonomous Driving Race Shifts From Hype to High Stakes For years, China’s hyper-competitive smart electric vehicle (EV) market ran on a heady cocktail of AI breakthroughs and marketing bravado.</li><li>To match the hype Tesla Inc. created with its end-to-end automated driving system, Chinese automakers coined jargon of their own, such as “Level 2++” and “Navigate on Autopilot,” promising technology that could guide vehicles through chaotic city streets with the skills of a seasoned chauffeur.</li><li>(London) — The U.K.’s financial regulator has fined and banned former executives of Dolfin Financial (UK) Ltd. for orchestrating a “visa loan” scheme that helped nearly 100 Chinese nationals — including a fugitive billionaire — fraudulently obtain U.K. residency.</li></ul>

In Depth: China’s Autonomous Driving Race Shifts From Hype to High Stakes For years, China’s hyper-competitive smart electric vehicle (EV) market ran on a heady cocktail of AI breakthroughs and marketing bravado.To match the hype Tesla Inc. created with its end-to-end automated driving system, Chinese automakers coined jargon of their own, such as “Level 2++” and “Navigate on Autopilot,” promising technology that could guide vehicles through chaotic city streets with the skills of a seasoned chauffeur.(London) — The U.K.’s financial regulator has fined and banned former executives of Dolfin Financial (UK) Ltd. for orchestrating a “visa loan” scheme that helped nearly 100 Chinese nationals — including a fugitive billionaire — fraudulently obtain U.K. residency.

CX Daily: China’s Autonomous Driving Race Shifts From Hype to High Stakes 

China

Shanghai Enflame Technology Co., Ltd. develops software products. The Company produces engineering softwares, computing and programming platforms, and other products. Shanghai Enflame Technology also produces artificial intelligence training chips, computer hardware products, and other products.

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Shanghai Enflame Technology (688801 CH)

Enflame Tech (688801 CH): One Customer, One Stack, 4% Float — Sell the Squeeze, Buy the Unlock

Endflame has ONE customer, one proprietary stack, 32% gross margin, 4% float. Enflame is priced as a platform; it is a Tencent supplier. BEARISH,...

Mo Aziz

Shanghai Enflame (燧原科技) Pre-IPO: Key Investment Thesis

CSRC has just approved Shanghai Enflame Technology's application to list on the STAR market, with an aim of raising Rmb6bn. Its FY26F P/S ratio is...

Osbert Tang, CFA

CX Daily: China’s Autonomous Driving Race Shifts From Hype to High Stakes

In Depth: China’s Autonomous Driving Race Shifts From Hype to High Stakes For years, China’s hyper-competitive smart electric vehicle...

Caixin Global

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

Enflame Tech (688801 CH): One Customer, One Stack, 4% Float — Sell the Squeeze, Buy the Unlock

Endflame has ONE customer, one proprietary stack, 32% gross margin, 4% float. Enflame is priced as a platform; it is a Tencent supplier. BEARISH,...

Mo Aziz

Shanghai Enflame (燧原科技) Pre-IPO: Key Investment Thesis

CSRC has just approved ​Shanghai Enflame Technology's application to list on the STAR market, with an aim of raising Rmb6bn. Its FY26F P/S ratio is...

Osbert Tang, CFA

CX Daily: China’s Autonomous Driving Race Shifts From Hype to High Stakes

In Depth: China’s Autonomous Driving Race Shifts From Hype to High Stakes For years, China’s hyper-competitive smart electric vehicle...

Caixin Global

CSRC has just approved Shanghai Enflame Technology's application to list on the STAR market, with an aim of raising Rmb6bn. Its FY26F P/S ratio is...