Core Viewpoint - Russia is developing a new processor named "Irtysh" based on China's LoongArch architecture, aiming for self-sufficiency and independence in technology amidst geopolitical pressures [1][4][22]. Group 1: Processor Development and Market Focus - The Irtysh processor is initially targeted at the server market, with plans to expand into the PC sector and potentially beyond Russia [2]. - The development of Irtysh involves significant investment, although specific amounts have not been disclosed [4]. Group 2: Geopolitical Context and Technology Independence - The need for self-sufficient computing capabilities has become an urgent reality for both China and Russia due to escalating sanctions from the U.S. on high-end chips and related technologies [5][6]. - The reliance on foreign technology has led to challenges for Russia, as seen with the Baikal processor's failure due to dependency on ARM licensing [9]. Group 3: Technical Features and Ecosystem - The Irtysh C616 processor utilizes the LoongArch LA664 core, providing a viable and sustainable technology path for Russia, free from U.S. regulatory constraints [12][13]. - The software ecosystem supporting LoongArch has matured, with various tools and operating systems already in place, enhancing its viability [12]. Group 4: Global Computing Landscape Shift - The emergence of LoongArch signifies a shift towards a multi-polar global computing architecture, moving away from the dominance of x86 and ARM [16]. - The collaboration between China and Russia in adopting LoongArch indicates the formation of a large-scale independent instruction set architecture, challenging Western technological hegemony [16][22]. Group 5: Economic Implications and Strategic Partnerships - The partnership with Tramplin Electronics for the Irtysh processor represents a strategic move for Russia to rebuild its technological framework and for China to expand its instruction set globally [21][22]. - The potential for ongoing revenue through IP licensing and technology services from the Irtysh processor could provide a stable cash flow for Chinese companies involved [21].

Core Insights - Longxin Zhongke's 3C6000 and 2K3000 chips are expected to enter mass production next year [1] Chip Development - The 2K3000 chip, released on June 26, integrates Longxin's GPU IP core LG200, which has certain inference capabilities and has been adopted by several clients [1] - The upcoming 9A1000 is the first GPGPU chip with low cost, targeting RX550 in graphics performance, and boasts tens of TeraFLOPS of computing power [1] - Future plans include the development of 9A2000 and 9A3000 chips [1] Application and Validation - The 3C6000 and 2K3000 chips released in the first half of the year are expected to undergo application validation in various typical scenarios this year, with mass production anticipated next year [1]

Core Viewpoint - The financial data and capital market trends are revealing the vulnerabilities of Longxin Zhongke, despite its narrative of "self-controllable" domestic chips, leading to a collective retreat of institutional investors [1][9]. Shareholder Reduction - Longxin Zhongke announced a shareholder reduction plan on May 9, with the third, fourth, fifth, and tenth largest shareholders planning to reduce their stakes, totaling approximately 3% of the company's total share capital [1][2]. - Seven out of the top ten shareholders have reduced their holdings, with specific plans to sell up to 3.88 million shares (0.97%), 3.58 million shares (0.89%), and 2.50 million shares (0.62%) among others [2]. Stock Performance - Following the reduction announcement, Longxin Zhongke's stock price dropped significantly, with the five-day average falling to 122.14 yuan [5]. - In the five trading days after the announcement, there was a substantial outflow of main funds totaling 98.17 million yuan [5]. Financial Performance - Longxin Zhongke reported a net loss of 625 million yuan for the full year of 2024, a year-on-year increase of 89.8%, and a first-quarter loss of 151 million yuan in 2025, worsening by 102.2% [9][12]. - The company has experienced negative operating cash flow for three consecutive years, with a net outflow of 335 million yuan in 2024 and further deterioration to -144 million yuan in the first quarter of 2025 [13][17]. Research and Development - The R&D expense ratio for Longxin Zhongke reached 105.3% in 2024, but the capitalization rate was only 19%, indicating ineffective output from the 980 million yuan R&D investment [12][13]. - The company faces significant inventory depreciation, with an inventory turnover period of 974 days, far exceeding the industry average of 300 days, leading to asset impairment losses of 249 million yuan [12]. Market Position and Challenges - Longxin Zhongke's revenue heavily relies on government procurement, which accounted for 53% of its income in 2024, but the collection period exceeds 270 days, resulting in a low accounts receivable turnover rate of 0.25 times [20]. - The company struggles with commercializing its technology, as its self-developed instruction set remains isolated, and the software ecosystem is underdeveloped, with only a few thousand compatible applications [19][20]. Future Outlook - Analysts suggest that the current market valuation of 492 billion yuan is inflated by 88% due to the "self-controllable" theme, with the actual hardware business valued at only 5.62 billion yuan [9]. - If the expected government procurement does not materialize in 2025, the price-to-sales ratio may need to be halved to below 50 times to align with the fundamentals, indicating a potential valuation bubble [9][20].