Perhaps the world doesn't lack smart people right now

Especially in the stock market, how many from Tsinghua and Peking University

All kinds of IQs 130+ are gambling foolishly

Not to mention quantitative software

Comparing who's smarter than whom

Competing to see who makes a few more percentage points today

The Chinese are accustomed to the law of the jungle, a zero-sum game field

Therefore, ordinary people should follow the path of simplicity

Admitting one's own stupidity might bring good luck

Respect time

When others don't want to compete

When institutions have KPI pressures

You're still on the field

Because you believe in the world

Good enterprises lie in entrepreneurial value

Especially thinking you can make money by reading those short articles about Deming Li

With 1,000,000+ year-on-year growth

Rush in, but without understanding the underlying logic

How many domestic companies can achieve such year-on-year numbers?

Learn to look at more data, financial reports (although financial reports are all...

But relatively more truthful for ordinary people

Module profits were all taken by upstream players, Q2 data was poor)

Deming Li Q1 revenue 7.5 billion, net profit 3.34 billion

Q2 revenue 9.5 billion, net profit 2.7 billion, where did the missing 640 million in profit go?

I. Core underlying logic: Q1 profit relied on low-cost inventory dividends

Q2 dividends faded

1. At the end of 2025, the company stockpiled on a large scale in advance, with extremely low particle procurement costs; The goods sold in 26Q1 were mostly this batch of low-cost inventory, with selling prices rising along with storage price increases, single-quarter gross margin surged to 44%, with inventory appreciation contributing over 2 billion in profit.

2. By Q2, the low-cost old inventory was basically digested, and the price of newly procured storage particles rose significantly, unit product raw material costs increased; Although revenue increased from 7.5 billion to 9.5 billion (selling 2 billion more goods), the gross profit margin for each sale was compressed, and the comprehensive gross margin declined significantly quarter-on-quarter.

II. Capital flow 1: Operating costs significantly eroded profits (largest destination)

Revenue increased by 26.7%, but upstream wafer and NAND particle procurement cost increases far exceeded revenue growth rate:

Q1 revenue 7.538 billion, operating cost only 3.21 billion;

Q2, to boost revenue, increased stockpiling and procured goods at high prices, the corresponding carryover costs for sales increased significantly, incremental revenue was almost eaten up by raw material price increases, and incremental income could not be converted into net profit.

III. Capital flow 2: Inventory occupied a large amount of cash, book profit did not turn into cash flow

As of the end of 26Q1, inventory was 12.192 billion yuan, a surge of 72.73% compared to the end of 2025, accounting for 66% of total assets.

In Q2, to fulfill orders, continued to increase stockpiling:

1. The book profit earned was all used to buy storage particles and produce finished goods, reflected in the balance sheet as "inventory," not retained as net profit;

2. Operating cash flow was negative, the company relied on short-term borrowing to stockpile, and financial interest expenses continued to increase.

IV. Capital flow 3: Various period expenses increased quarter-on-quarter

1. R&D expenses: Expanded enterprise SSD, main control chip R&D, increased personnel and equipment investment;

2. Financial expenses: Inventory expansion relied on borrowing, short-term loan scale increased, interest expenses continued to rise;

3. Sales/administrative expenses: Revenue expansion required supporting sales teams, channel expansion, capacity management, expenses increased accordingly, further squeezing net profit.

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