Cambricon(SH:688256) Donghai Securities·2025-06-29 11:13Investment Rating - The report initiates coverage with a "Buy" rating for the company [6]. Core Insights - The company is a rare domestic AI chip manufacturer that provides integrated cloud-edge-end solutions, focusing on both hardware and software to support complex AI applications across various industries. The company has seen significant revenue growth and profitability due to strong domestic demand for AI chips and its leading technology [6][29]. Summary by Sections 1. Domestic AI Chip Market - The company is positioned as a scarce player in the domestic AI chip market, offering a series of intelligent AI chip products and platform software that integrate cloud, edge, and end solutions. Its products are widely used in sectors such as internet, finance, transportation, energy, and manufacturing [14][18]. 2. Revenue Growth and Profitability - The company has experienced a substantial increase in revenue, with a 4230.22% year-on-year growth in Q1 2025, and has turned profitable with a net profit of 3.55 billion yuan, reflecting a 256.82% increase [6][29]. The cloud product line has significantly contributed to this growth, accounting for 99.30% of total revenue in 2024, up from 12.77% in 2023 [21]. 3. Market Dynamics - The demand for AI chips is expected to grow significantly, with the global AI chip market projected to reach $92 billion in 2025, a year-on-year increase of 29.58%. The domestic market is anticipated to reach 141.2 billion yuan in 2024, representing about 28% of the global market [6][29]. 4. Hardware and Software Integration - The company’s cloud AI chips are the main revenue drivers, with the MLU370-X8 single card performance comparable to mainstream 350W RTX GPUs. The software platform, Cambricon Neuware, supports major AI models, enhancing the company's competitive edge [6][29]. 5. Financial Projections - The company forecasts revenues of 84.43 billion yuan, 161.71 billion yuan, and 251.05 billion yuan for 2025, 2026, and 2027 respectively, with year-on-year growth rates of 618.91%, 91.52%, and 55.25%. Net profits are projected to be 15.95 billion yuan, 38.60 billion yuan, and 69.13 billion yuan for the same years, with growth rates of 452.69%, 141.96%, and 79.09% respectively [6][8]. 6. Competitive Landscape - Despite the dominance of foreign chip leaders, domestic brands like the company are rapidly increasing their market share, expected to reach 40% by 2025. The company benefits from its technological advantages and strong domestic demand for AI chip replacements [6][29]. 7. Management and Structure - The company has a stable ownership structure, with the founder holding 35.97% of the voting rights. The management team is experienced, with a significant portion holding advanced degrees in relevant fields [24][27].