Core Insights - Dongxin Co., Ltd. reported unexpected financial results for the first three quarters of 2025, with revenue of 572 million yuan, a year-on-year increase of 28%, but a net loss of 166 million yuan, which has widened compared to the previous year [2][4] Financial Performance - In Q3 2025, Dongxin achieved a revenue of 229.5 million yuan, a 27% increase year-on-year, marking three consecutive quarters of growth [3][4] - The gross margin improved from 18.76% in the first half of the year to 26.7% in Q3, reflecting a year-on-year increase of 10.5% [2][4] Investment and Strategic Direction - The company's losses were primarily driven by significant investments in Shanghai Lishan Technology, often referred to as the "domestic Nvidia," resulting in an investment loss of 68.14 million yuan for the first three quarters [5][4] - Dongxin is pursuing a "storage, computing, and connectivity" integrated development strategy to diversify its business beyond storage chips, which have been under pressure due to cyclical fluctuations [4][5] Inventory Levels - Dongxin's inventory reached a historical high of 1 billion yuan by the end of Q3 2025, reflecting a 12.4% increase compared to the end of 2024, and accounting for 35.83% of current assets [8][6] - The high inventory levels have raised concerns, as the company had previously anticipated a recovery in market demand driven by AI, but the actual inventory reduction has not met expectations [8][6]