Cambricon

Cambricon, China’s 2nd biggest AI chip developer, posted 3rd quarter revenue of 3.531 billion yuan (US$496M), far short of the 6.26 billion expected due to capacity constraints and memory chip shortages, media report, noting its net profit soared 148% to 1.404 billion. Cambricon said demand remains strong and it will meet its full-year revenue forecast of 13.5 billion, up from 2025 revenue 6.5B. #Huawei #Cambricon

Source: Dan Nystedt

Birentech 1H26 quick take: Post-market on Aug 28, Birentech released its first results since listing. As the company had already issued an interim profit alert on Aug 17 with ranges for revenue and loss, the better-than-expected narrowing was largely priced in.However, the next-day and subsequent tape suggested investors were not buying it.

In our initiation, we laid out the stock’s beta logic and H2 catalysts. This note tracks what in the print merits attention.

1. Revenue

Despite revenue surging +2,000% YoY to RMB 1.236bn, QoQ growth was only +26.6%, indicating no sustained step-up. The core revenue driver remains BR166X, which we flagged as a dated product in our coverage.Market focus is still squarely on BR20X.

2. Gross margin

GPM expanded 1,100bps YoY, yet it is clearly lower vs. peers Moore Threads/MetaX with near-60% GPM. This is largely due to the current mix being BR166X-heavy.Mass production of BR20X should improve margin structure.

3. Leading indicators

Downstream CSPs such as Tencent and Alibaba have materially ramped CAPEX, but this cycle has yet to show up in Birentech’s leading indicators. Inventories rose 28% vs. FY25, broadly in line with revenue growth, while contract liabilities shrank slightly.This suggests downstream orders have not flowed in meaningfully to Birentech, as BR166X lags peers by a generation and has not broken through with customers.

BR20X has taped out in small volumes, and prepayments rose +230% vs. end-FY25, likely reflecting upstream capacity reservations. We expect a meaningful ramp for BR20X in 2027.

4. Valuation

The company’s current market cap is RMB 87bn. We see domestic compute as a clear investment theme, with BR20X commercialization and customer breakthroughs remaining the key H2 watchpoints.That said, the fundamentals in this print do not point to a strong alpha name.

We think the tape-out validation cadence is not fast, and BR20X, initially slated for H2 commercialization, may be delayed. In the supply chain, leading foundry SMIC’s advanced-node capacity is primarily allocated to Huawei and Cambricon, and Hua Hong’s capacity ramp is another key risk.

In Dolphin Research’s TAM sizing, the AI xPU market reaches $80–90bn by 2030. Under a conservative case of 1.5% share (our base-case market split: Huawei ~70%, Cambricon ~10%, and if the remaining eight players split evenly, Birentech at ~2.5%), that implies revenue of $1.2–1.35bn.Assuming ~15x PS in 2030 and a 40% margin (≈38x PE), discounted back to 2026 at 13%, the fair value is $11–12bn, or ~HK$80bn.We see better downside protection at that level. $BIREN TECH(06082.HK)

The Monetary Authority of Singapore tightened the slope of the Singapore dollar's nominal effective exchange rate policy band on April 14 (the first rate hike in four years) and raised its 2026 inflation forecast to 1.5–2.5%; the government launched a support plan worth nearly S$1 billion.

This is the first time the Singapore government has responded to the impact of the Middle East conflict on Singapore's economic system.

Well not surprising isn’t it that MAS did what it did. It was just the responsible thing to do with the impending uptick in inflation.

Alibaba’s chip unit has delivered over 100,000 of its most advanced AI chip, Zhenwu 810E, more than chip darling Cambricon Technologies, China-state controlled media report. Beijing requires companies to use AI chips developed in China, although Nvidia hopes to sell its powerful H200 AI chips in the nation. Alibaba may spin-off its chip unit, T-Head, for a stock-market listing. $Alibaba(BABA.US) #semiconductors #semiconductor

Source: Dan Nystedt