Moore Threads’ 20% Plunge Exposes a Broader Reckoning in China’s GPU Stocks
A RMB 5 billion (US$694 million) single-day market cap wipeout at Moore Threads has exposed a structural fault line running through China's entire listed GPU sector: astronomical price-to-sales multiples built on pre-commercial revenues are colliding head-on with an accelerating unlock calendar.
On September 7, 2026, Moore Threads (688795.SH) — China's first publicly traded GPU pure-play — suffered its inaugural limit-down session, closing at RMB 415.49 per share to set a post-IPO low. Market capitalization fell to RMB 195.3 billion (US$27.1 billion), breaching the psychologically significant RMB 200 billion threshold. The catalyst was the release of 25.774 million shares — representing 5.48% of total share capital but a staggering 85% of previously available float — from their nine-month IPO lock-up. Investors who acquired shares at the RMB 114.28 IPO price still pocketed a 2.6x return even at the limit-down price, creating near-irresistible selling incentives.
By midday on September 8, Moore Threads extended losses with an intraday decline exceeding 9%, bringing the cumulative drawdown from its December 2025 peak of RMB 941.08 to approximately 56% — erasing nearly RMB 250 billion (US$34.7 billion) in market value over nine months.
Unlock Wave Compounds Selling Pressure Across the Cohort
The September 7 event is not an isolated shock but the opening chapter of a multi-year dilution sequence that investors are only beginning to price.
Moore Threads faces a far larger unlock on December 7, 2026, when 186 million founder and institutional shares — held by shareholders including the company's fourth-largest investor Shenzhen Minghao and fifth-largest Guosheng Capital — become freely tradeable. This tranche represents 39.55% of total share capital; at current prices, its implied market value stands at approximately RMB 77.2 billion (US$10.7 billion). Two further tranches of 73.81 million and 145 million shares are scheduled for December 2028 and December 2029 respectively.
The contagion spread immediately. On the same session, MetaX (688802.SH) fell 9.67% to RMB 570.08; Iluvatar CoreX (9903.HK) dropped 11.42% to HK$339.8; and Biren Technology (6082.HK) declined 1.06% to HK$41.16. All four companies listed on either the A-share STAR Market or Hong Kong between December 2025 and January 2026, and all four benefited from a semiconductor sector re-rating between March and June 2026 before rolling over sharply.
MetaX itself faces its own unlock on September 17, when 13.966 million shares — approximately 3.49% of total capital — are released, expanding float by 75%. A second MetaX unlock of 10.919 million original shareholder shares follows on December 17.
Valuation Compression Reveals the Magnitude of the Re-Rating Required
The sector's selloff reflects a belated reckoning with valuations that were never anchored to near-term earnings power.
As of July 1, 2026, when the correction was already underway, Moore Threads, MetaX, Iluvatar CoreX, and Biren traded at trailing price-to-sales multiples of 125x, 152x, 103x, and 59x respectively — versus 18.86x for Nvidia (NVDA.US), the global compute benchmark. By September 7 close, those multiples had compressed to 77x, 111x, 48x, and 42x — still representing a 2.5x to 5.9x premium to Nvidia on a revenue basis, for companies that have yet to demonstrate sustainable operating profitability.
Morgan Stanley chief U.S. equity strategist Michael Wilson flagged the rotation risk explicitly in July 2026, recommending investors reduce semiconductor exposure in favor of hyperscale cloud operators. The call has proven prescient: Iluvatar CoreX has shed more than 60% from its June peak, while the other three names have each fallen more than 40% from their respective highs.
Profitability Picture Remains Structurally Challenged
First-half 2026 revenue growth across the cohort was genuine and rapid — but the quality of reported profits demands scrutiny.
Moore Threads posted H1 revenue of RMB 1.736 billion (US$241 million), up 147.42% year-on-year and already exceeding full-year 2025 revenue. Net loss attributable to shareholders narrowed 95.73% to RMB 11.56 million (US$1.6 million); however, the non-recurring-adjusted net loss remained RMB 151 million (US$20.9 million), narrowing 52.37% year-on-year. Biren posted H1 revenue of RMB 1.236 billion (US$171.7 million), up 1,997.6%, with losses narrowing sharply from RMB 1.6 billion to RMB 377 million.
The two companies that reported headline profits — MetaX and Iluvatar CoreX — require closer examination. MetaX's RMB 612 million (US$85 million) net profit was driven almost entirely by RMB 887 million in fair-value gains on trading financial assets, which exceeded total profit by 105.75%; operating cash flow was negative RMB 1.297 billion. Stripping out the non-recurring item, MetaX's adjusted net loss was RMB 49 million. Iluvatar CoreX's RMB 106 million profit similarly depended on RMB 756 million in fair-value gains from its SJ Semiconductor Corporation stake; the core business remained loss-making.
UBS Securities China technology research head Yu Jia told Yicai that domestic AI chip demand is still growing strongly in 2026, underpinned by a visible acceleration in Chinese cloud providers' capital expenditure. She projects continued rapid volume growth from H2 2026 through 2027. However, she also identified supply-side constraints — including advanced-node wafer yields at domestic foundries, as well as potential bottlenecks in HBM, capacitors, and PCBs — that could limit near-term shipment cadence.
Moore Threads Accelerates Commercialization to Justify Remaining Premium
Against the market turbulence, Moore Threads is pressing forward with its product roadmap in a bid to close the credibility gap with investors.
Founded in June 2020 by Zhang Jianchong, a former Nvidia Corporate Vice President and Greater China General Manager, the company has built a full-stack GPU portfolio spanning cloud, edge, and endpoint applications. Its fourth-generation "Pinghu" architecture, anchored by the MTT S5000 — supporting FP8 through FP64 precision — underpins the KUAE 10,000-card intelligent compute cluster designed for large-model training and inference.
Recent deployment milestones include a full training run of the Beijing Academy of Artificial Intelligence's RoboBrain 2.5 embodied AI model on MTT S5000 clusters, and Peking University's EvoPhys team training its 5D world model EvoPhys-World on the same platform. The company also achieved day-zero compatibility with DeepSeek-V4, MiniMax H3, Kimi-K3, and Zhipu GLM-5.3-Flash on MTT S5000.
On the customer front, Moore Threads confirmed it has secured contracts with leading internet platforms and major telecommunications operators in H1 2026 — a meaningful step toward revenue diversification.
The fifth-generation "Huagang" architecture is already in development, with the "Huashan" AI training-inference chip and the "Lushan" high-performance graphics chip targeted for launch. Moore Threads indicated Lushan-based products could reach market before year-end 2026.
Zhang Jianchong directly holds 9.41% of the listed company and indirectly controls a further 1.42% through holding vehicles including Nanjing Shenao and employee platforms Hangzhou Huaao, Hangzhou Zhongao, and Hangzhou Jinao, for a combined 10.83% stake. At current prices, his equity is valued at approximately RMB 21 billion (US$2.9 billion) — down sharply from peak levels.
Enflux IPO Further Dilutes Scarcity Premium
A secondary headwind materialized on September 7 when Enflame Technology (688801.SH) published its share issuance results, pricing 43.035 million shares at RMB 142.18 each ahead of an imminent STAR Market debut. At that price, Enflame's post-IPO market capitalization stands at approximately RMB 61.2 billion (US$8.5 billion) — less than one-third of Moore Threads' current valuation.
Enflame's listing directly erodes the scarcity premium that Moore Threads has commanded as the sole pure-play domestic GPU vehicle on the A-share market. With four GPU names now listed or imminently listing across A-shares and Hong Kong, portfolio managers can increasingly disaggregate China GPU exposure — reducing the valuation floor for any single name.
The sector's near-term trajectory will hinge on whether accelerating revenue growth can outrun the dilution calendar. With Moore Threads' December 2026 unlock alone representing roughly 40% of total shares outstanding at current prices exceeding RMB 77 billion, the burden of proof on management to demonstrate a credible path to core profitability has rarely been higher.
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