Key Points Summary
Moore Threads, which has been listed for only 8 months, reported revenue of 1.74 billion yuan in the first half of the year (a 150% increase year-on-year, exceeding its entire revenue for last year). Although it had a net loss of 11.56 million yuan on paper, it achieved a profit of 83.53 million yuan after adjustments. The company also announced plans to list in Hong Kong. 97.5% of its revenue comes from its intelligent computing centers (cloud-based products), with consumer-grade graphics cards serving more as an entry point into its ecosystem. Although it is close to profitability, its main business is still loss-making due to high R&D costs and tight cash flow. It relies on a few key customers. The market is betting on its potential to replace imported GPUs, but the company itself expects to start making a profit only in 2027.
Detailed Analysis
1. Revenue: Intelligent Computing Centers Drive Performance, with Consumer-Grade Graphics Cards as an Ecosystem Entry Point
Moore Threads' main source of income comes from its intelligent computing centers, specifically cloud-based cards, all-in-one devices, and clusters, which accounted for 97.5% of its revenue in the first half of the year. Consumer-grade graphics cards are more used for marketing purposes—helping to introduce Moore Threads to the general public and build a software ecosystem (for example, by getting developers accustomed to using its systems). However, revenue is highly dependent on a few key customers; the top five customers account for 99% of its receivables, with the largest customer contributing 56.6% of revenue in the first half of 2025. This means that fluctuations in business could be significant if one of these major customers delays or cancels an order.
2. Profitability: Turning Losses into Profits, but the Main Business Is Still Losing Money
The company had a net loss of 11.56 million yuan on paper (96% less than last year), but after deducting share-based incentive costs, it reported a profit of 83.53 million yuan—this is its first semi-annual profit after adjustments. However, excluding non-recurring revenues such as government subsidies (88.23 million yuan) and financial gains (59.52 million yuan), the main business still incurred a loss of 150 million yuan. The gross margin decreased from 69% last year to 56.9%, mainly due to the need to purchase external components like memory and power supplies for its intelligent computing clusters, which reduced overall profits. Nevertheless, the gross margin for its cloud-based products remained at 57.4%, indicating that the products themselves are profitable, though the expansion of the business has led to short-term cost increases.
3. Financial Pressure: Prepaying for Inventory and Seeking Funds in Hong Kong
Moore Threads holds a large amount of inventory and prepaid payments, totaling nearly 4.9 billion yuan (a 166% increase from the beginning of the year). This is because of the instability in the semiconductor supply chain; by locking in chip production capacity and materials in advance, it aims to avoid shortages. However, only 87.52 million yuan worth of orders have been signed, far less than the amount of inventory purchased. If future orders do not meet expectations, this inventory could depreciate (with a provision for impairment of 220 million yuan already made). Cash flow is particularly tight, with a net outflow of 2.17 billion yuan in the first half of the year, reducing its cash reserves from 9.18 billion yuan to 6.49 billion yuan, and it also took on a long-term loan of 2.83 billion yuan. This is why it needs to raise funds in Hong Kong so soon after listing—R&D, supply chain management, and market expansion all require significant funding.
4. Technical Approach: "Full-Function GPU" Strategy with an Ecosystem as the Biggest Challenge
Moore Threads focuses on developing "full-function GPUs"—chips that can handle AI, graphics rendering, video encoding/decoding, etc., unlike Cambricon, which specializes in AI-specific chips. The advantage is a wider range of applications, but the downside is slower profitability, as it must develop both the hardware, software, and the necessary ecosystem. The biggest challenge is building an ecosystem; NVIDIA's CUDA system has been widely used for over a decade, and developers worldwide are accustomed to it. Moore Threads has developed the MUSIFY tool to convert CUDA code into its own MUSA format, reducing the cost for customers to switch. However, building an ecosystem takes time—Cambricon, which specializes in AI chips, has already achieved profitability.
5. Valuation: The Market Buys into Domestic Alternatives, but the Company Is More Cautious
Moore Threads' market value is 269.8 billion yuan (5 times its initial offering price), with a price-to-book ratio of 22. Despite cumulative losses of 2.35 billion yuan, the market recognizes its potential as a domestic GPU alternative, especially given restrictions on imported chips. The company itself is cautious, stating that it expects to start making a profit by 2027 only if it meets revenue targets of 5.98 billion yuan and a gross margin of 61%, including 310 million yuan in government subsidies. The current semi-annual profit does not yet indicate sustained profitability.
In Summary
Moore Threads is considered a "potential stock" in the domestic GPU market, driven by rapid growth from its intelligent computing centers. Although it is close to profitability, it faces significant financial pressure. Whether it will succeed in the long term depends on its ability to build a strong ecosystem, maintain stable orders, and manage its cash flow effectively. The market is betting on its potential to replace NVIDIA, but the company is taking a cautious approach, focusing on steady progress step by step.