China memory module giant’s first-half profit set to jump more than 600-fold

One of China’s biggest memory module makers is forecasting a more than 600-fold surge in first-half profit, highlighting the boost to the mainland’s downstream storage companies from the global memory-chip upcycle. Shenzhen Longsys Electronics said on Friday evening that the net profit attributable to shareholders was expected to reach between 9.2 billion yuan (US$1.36 billion) and 11 billion yuan for the six months ended June 30, compared with just 14.8 million yuan a year earlier. That would represent year-on-year growth of between 62,204 per cent and 74,394 per cent, according to the company’s preliminary earnings forecast. Revenue was expected to reach 22 billion yuan to 25 billion yuan, compared with 10.2 billion yuan a year earlier. Shares of Longsys jumped 12.5 per cent in Shenzhen on Monday morning after the forecast, trading at 695.25 yuan as of around 10am. Other Chinese storage-related stocks also rose, with Shenzhen-listed CEAC International hitting its 10 per cent daily limit and Shanghai-listed Biwin Storage Technology gaining 3.7 per cent. Longsys attributed the sharp improvement to stronger downstream demand and limited growth in global memory wafer capacity, which it said had created a favourable market environment for the semiconductor memory industry. The company also said it had renewed wafer supply agreements, including long-term agreements or memorandums of understanding, with several major global memory wafer suppliers, helping secure resources for future growth. The forecast adds to signs that China’s memory supply chain is benefiting from a global rebound in DRAM and NAND markets, where artificial intelligence demand has tightened supply and lifted pricing across parts of the industry. While upstream Chinese chipmakers such as ChangXin Memory Technologies and Yangtze Memory Technologies Corp have drawn attention for their push into DRAM and NAND production, downstream module and storage-product vendors are also seeing stronger demand. These companies buy memory chips, package them into products such as solid-state drives and memory modules, and sell them into consumer, enterprise and industrial markets. The profit forecast comes weeks after Chinese regulators approved Longsys’ plan to raise funds through a private share placement, giving the company another financing channel as it tries to move up the storage value chain. Longsys plans to raise up to 3.7 billion yuan through the share sale, with proceeds earmarked for high-end memory products for AI applications, storage controller chips, advanced packaging and testing capacity. Separately, Longsys refiled an application in late May to list in Hong Kong, adding another potential fundraising route alongside the planned private share placement.