Zhongyuan Electronics Cambricon(688256) Annual Report Review: AI chip products continue to iterate, strengthening competitive advantages across multiple fields

Key Takeaways

Event: Recently, the Company released its 2025 annual report. In 2025, the Company achieved revenue of RMB 6.5B, representing a year-over-year increase of +453.20%. The attributable net profit to shareholders was RMB 2.06B, turning a loss into a profit. The non-GAAP attributable net profit was RMB 1.77B, turning a loss into a profit. In Q4 2025, the Company’s single-quarter revenue was RMB 1.89B, up +91.05% year over year and +9.44% quarter over quarter. The attributable net profit to shareholders in Q4 was RMB 455 million, up +67.03% year over year and down -19.76% quarter over quarter. The non-GAAP attributable net profit in Q4 was RMB 351 million, turning a loss into a profit, and down -30.67% quarter over quarter.

Investment Highlights:

High-speed growth in performance in 2025, with a significant increase in inventory at the end of Q4. In 2025, benefiting from the continued surge in AI compute demand, the Company leveraged its strong competitive product capabilities to expand the market and actively promoted the deployment of AI application scenarios, driving a substantial year-over-year increase in revenue. In 2025, the Company’s gross margin was 55.15%, down 1.56% year over year. In Q4 2025, the gross margin was 54.81%, down 2.18% year over year, and up 0.57% quarter over quarter. In 2025, the Company’s net profit margin was 31.68%, turning a loss into a profit. In Q4 2025, the net profit margin was 24.05%, down 3.40% year over year and down 8.75% quarter over quarter. The Company continuously increased R&D investment, focused on AI chip products, and strengthened the technical foundation of chips. In 2025, R&D investment reached RMB 1.17B, up 9.03% year over year, and R&D investment as a percentage of operating revenue was 17.99%. At the end of Q4 2025, the Company’s inventory was RMB 4.94B, up RMB 3.73B from RMB 1.22B at the end of Q3 2025. Inventory increased significantly, which lays a foundation to support continued growth in future performance.

AI compute demand is breaking out, and domestic AI chip manufacturers are expected to accelerate development. Cloud providers at home and abroad have continued to increase capital expenditures in the AI space, and domestic intelligent computing data centers are accelerating construction, driving the breakout of AI compute demand. With the rapid growth in AI compute capacity, it will generate stronger demand for AI chips. According to a forecast by Frost & Sullivan, the market size of China’s AI intelligent computing GPUs is expected to reach RMB 171.22B in 2025 and RMB 1,033.340 billion by 2029, with a CAGR of 56.7% from 2025 to 2029. China’s AI chip market is entering a golden period of technological upgrades, domestic substitution, and application expansion. Domestic AI chip manufacturers are expected to accelerate development. Domestic AI chip manufacturers are continuously breaking through technological barriers, speeding up the process of independent and controllable AI chips, and are expected to continue to increase their market share.

AI chip products continue to iterate, strengthening competitive advantages across multiple fields. The Company has mastered core technologies such as AI chip instruction sets, microarchitectures, programming languages, and mathematical libraries, and continues to iterate the microarchitecture, instruction set, training software platform, and inference software platform. The new-generation intelligent processor microarchitecture and instruction set under R&D will focus on optimization for scenarios including training and inference of natural language processing large models, video/image generation large models, and vertical large models, improving product competitiveness in programming flexibility, ease of use, performance, power consumption, area, and other aspects. Based on its significant progress in AI chip products, foundational software platforms, and cluster software toolchains, the Company continuously strengthens its competitive advantages in multiple sectors such as telecom operators, finance, and the internet. In the internet sector, the Company is anchored in core application scenarios such as large models and multimodal technologies. It has carried out deeper technological cooperation with customers across various industries in areas including operator development and performance optimization, framework optimization, and communication optimization, enhancing the fit between the Company’s products and customers’ businesses, and significantly improving the overall product strength of the Company’s products in typical internet application scenarios.

Earnings Forecast and Investment Recommendation. The Company is a leading domestic AI chip enterprise. Its products continue to iterate and upgrade, and it continuously strengthens competitive advantages of its products across multiple areas such as the internet. The Company is expected to fully benefit from the wave of breakout AI compute demand and the trend of AI chip localization. We expect the Company’s revenue for 2026–2028 to be RMB 14.916/25.346/40.54B, and attributable net profit to shareholders for 2026–2028 to be RMB 4.797/8.700/14.52B. EPS corresponding to this is RMB 11.38/20.63/34.44. The corresponding PE is 86.42/47.65/28.54 times. This is the first coverage; we give a “Buy” rating.

Risk Warning: Intensifying industry competition; escalating international geopolitical conflicts; downstream demand falling short of expectations; R&D progress on new products falling short of expectations.

Disclai mer

Statement of Securities Analyst Commitment:

The securities analyst who signs this report possesses the qualification for practicing as a securities analyst granted by the China Securities Practitioners Association. My employment complies with relevant compliance requirements of regulatory authorities. Based on a diligent and prudent professional attitude, rigorous research methods, and analytical logic, I independently and objectively prepare this report. This report accurately reflects my research views. I take responsibility for the contents and viewpoints of this report, and ensure that the sources of information in the report are legal and compliant.

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