Cambricon(SH:688256) First Shanghai Securities·2025-06-03 04:48Investment Rating - The report assigns a "Buy" rating with a target price of 987 RMB, indicating a potential upside of 63.5% from the current price of 603.66 RMB [2][4]. Core Insights - The company is positioned as a leader in the domestic AI chip market, providing a comprehensive ecosystem of cloud, edge, and terminal smart chips, along with foundational software development kits [4][5]. - The demand for computing power is surging due to the rapid advancement of artificial intelligence applications, particularly following the emergence of models like ChatGPT [4][34]. - The report anticipates significant growth in the domestic computing power market, driven by the need for AI chips, with projections indicating a doubling of market capacity by 2025 [4][42]. - The company is expected to achieve revenues of 8.42 billion RMB in 2025, with net profits projected at 2.77 billion RMB, reflecting a strong growth trajectory [4][3]. Financial Summary - Revenue (in million RMB): - 2023: 709 - 2024: 1,174 - 2025: 8,416 - 2026: 13,483 - 2027: 21,603 - Net Profit (in million RMB): - 2023: (848) - 2024: (452) - 2025: 2,766 - 2026: 4,808 - 2027: 8,228 - Earnings per Share (in RMB): - 2023: (2.0) - 2024: (1.1) - 2025: 6.6 - 2026: 11.5 - 2027: 19.7 - Price-to-Earnings Ratio: - 2025: 91.1 - 2026: 52.4 - 2027: 30.6 [3][4]. Company Overview - The company, founded in 2016, has established itself as a key player in the AI chip sector, with a focus on high-performance computing solutions [4][6]. - The core team consists of experienced professionals from prestigious institutions, enhancing the company's innovation and stability [9][10]. - The company has developed a series of products that compete directly with NVIDIA's offerings, including the latest SiYuan 590 chip, which matches the performance of NVIDIA's A100 [4][22]. Market Context - The global demand for AI chips is expected to grow significantly, with North American cloud providers increasing their capital expenditures for AI computing [35][41]. - The domestic market is projected to see substantial investments in AI computing power, with major players like Alibaba and Tencent expected to increase their capital expenditures significantly by 2025 [42][43]. - The competitive landscape is influenced by geopolitical factors, particularly the U.S. restrictions on chip exports to China, which may benefit domestic manufacturers [51][52].