Cambricon(SH:688256) Hua Er Jie Jian Wen·2025-08-25 01:26Core Viewpoint - Goldman Sachs has significantly raised the target price for Cambricon from 1223 RMB to 1835 RMB, indicating a potential upside of 47.6% and maintaining a "buy" rating [1] Group 1: Market Drivers - The surge in capital expenditure by domestic cloud service providers is a key driver, with Tencent's capital spending increasing by 119% year-on-year in Q2 2025, positively impacting AI chip suppliers [3] - The trend of supply chain diversification is creating opportunities for local chip manufacturers, as domestic models like DeepSeek are adapting to next-generation chips, reducing reliance on single suppliers [3] - Cambricon's commitment to R&D is confirmed with a planned investment of 4.5 billion RMB over the next three years for AI chip and software development, indicating a strong focus on technological innovation [3] Group 2: Valuation Methodology - Goldman Sachs utilized a forward-looking discounted EV/EBITDA model, setting the valuation benchmark year at 2030, with an expected EBITDA margin of 22% [4] - The target multiple for 2030 EBITDA was raised from 49x to 65x, reflecting a market re-evaluation of the Chinese AI supply chain [4] - The calculated enterprise value for 2030 was discounted back to present value using a cost of equity of 12.7%, resulting in the target price of 1835 RMB per share [4] Group 3: Valuation Scenarios - In a bullish scenario, if Cambricon's chip shipment growth rate reaches approximately 90% annually, the target price could rise to 3934 RMB [5] - In a bearish scenario, if the shipment growth rate slows to about 60%, the target price could drop to 1211 RMB [5] - The target price corresponds to a 9x EV/Sales for 2030, which is lower than the company's trading range since 2022 [7]