Core Summary
In the first half of 2026, Cambricon’s revenue and net profit both doubled, but the growth rate in the second quarter slowed down compared to the same period last year. Although R&D investment increased, its proportion of total revenue decreased. Costs rose faster than revenue, resulting in a decrease in net cash flow, and inventory levels were high. Investor Zhang Jianping, who was previously one of the top ten shareholders, withdrew from the company, while Chairman Chen Tianshi increased his stake in Cambricon. The stock price has dropped from a peak market value of over one trillion yuan to around 750 billion yuan.
1. Performance: Strong Growth Momentum, but Slowing Growth in the Second Quarter
Cambricon’s revenue for the first half of the year was 5.996 billion yuan (a year-on-year increase of 108%), and its net profit was 2.311 billion yuan (a year-on-year increase of 122%), showing impressive overall performance. However, the growth rate in the second quarter was slower than that in the first quarter:
- Revenue increased by 159% year-on-year in the first quarter and only by 75.9% in the second quarter; net profit increased by 185% year-on-year in the first quarter and 90% in the second quarter.
- On a quarterly basis, however, there was still growth: revenue in the second quarter was 226 million yuan higher (7.8%) than in the first quarter, and net profit was 285 million yuan higher (28.1%).
Possible reasons for this include a lower base in the first quarter (revenue was lower compared to the same period last year) or a shift in the company’s business strategy from rapid expansion to steady growth. Nevertheless, Cambricon is still expanding its operations, especially through partnerships with leading financial and internet companies, which have led to more orders.
2. R&D: More Investment, but a Lower Proportion of Revenue
R&D spending for the first half of the year was 703 million yuan, an increase of 29% compared to last year, but its proportion of total revenue decreased from 18.8% to 11.7%. This does not indicate a reduction in R&D efforts; rather, it reflects the rapid growth of revenue outpacing R&D spending:
- For example, last year, revenue was 2.88 billion yuan, and R&D costs were 540 million yuan (18.8%); this year, revenue has doubled to 6 billion yuan, but R&D costs have only increased to 700 million yuan (11.7%). This means that although the amount spent on R&D has not decreased, the total revenue has grown significantly, resulting in a lower proportion of R&D spending.
3. Costs and Cash Flow: Rising Costs Outpacing Revenue, Reduced Cash Flow
- Costs: Operating costs were 2.682 billion yuan, a year-on-year increase of 111%, which was faster than the 108% growth in revenue, leading to a slight decrease in gross profit margin (from 55.92% to 55.25%). However, a gross profit margin of 55% is still quite high, indicating that the company’s products are competitive.
- Cash Flow: Net operating cash flow was 311 million yuan, 65% lower than last year. The company explained this by stating that there were increased expenses for purchasing materials and paying taxes.
- Inventory: Inventory at the end of June amounted to 8.247 billion yuan, accounting for 45% of total assets. This is a concern; it could indicate that the company is stockpiling goods in anticipation of demand or that products are not selling as quickly as expected. Fortunately, accounts receivable decreased by 66.9% year-on-year, and prepayments to suppliers increased by 291%, suggesting that the company is proactive in managing its supply chain.
4. Shareholders and Stock Price: Investor Withdrawal, Chairman’s Stake Increase, and Stock Price Decline
- Shareholder Changes: Zhang Jianping, who was one of the top five shareholders at the end of last year, is no longer among the top ten. Chairman Chen Tianshi increased his stake by 58.57 million shares, demonstrating confidence in the company’s future.
- Stock Price Fluctuations: Cambricon became the first company on the STAR Market with a market value of over one trillion yuan at the end of June, but its stock price has now dropped to around 753.9 billion yuan, a decrease of 248 billion yuan. This could be due to the rapid increase in stock price earlier in the year or concerns about high inventory levels and reduced cash flow. Nevertheless, a market value of 750 billion yuan still makes Cambricon the largest company in the STAR Market, indicating ongoing interest in AI computing power.
5. In Summary
Cambricon’s performance in the first half of the year was excellent, but there are some issues that require attention: slower growth in the second quarter, high inventory levels, and reduced cash flow. Changes in shareholders and stock price fluctuations reflect market skepticism about the company’s future. However, Chairman Chen Tianshi’s increased stake and the ongoing demand for AI computing power suggest that Cambricon remains a key player in the industry. For investors, it is more important to focus on whether the company’s business is growing sustainably and whether its R&D efforts are keeping up with industry trends, as AI computing power will be a major driver of growth in the coming years.