Summary of Conference Call on Global Memory Technology Industry Overview - The conference call primarily discusses the **NAND and DRAM memory markets** and their forecasts for the upcoming quarters and years, with a focus on key players like **Kioxia** and **Korean chipmakers**. Key Points NAND Market Insights - **Global NAND sales forecasts** for 3Q and 4Q 2025 have been raised by **2.8% and 2.5%** respectively, driven by a **3.9% and 2.5%** increase in bit shipment projections, despite a near **1% decrease in ASP** assumptions [1][8] - Kioxia reported strong bit growth of **high-30% QoQ** in its September 2025 quarter, but with a weaker ASP decline of **low-single digits** [1][8] - The outlook for 4Q 2025 indicates minimal bit growth due to low inventories, while ASP is expected to increase by **10% +/-** for commodity NAND [1][8] - The NAND industry is projected to enter a **mid to upcycle stage** starting from 2H 2025, with global NAND sales expected to grow **28% YoY** in 2026, following declines of **-37%** in 2023 and **+2%** in 2025 [1][8] DRAM Market Insights - **DRAM prices** are anticipated to be strong in 4Q 2025, with expectations of a **15-20% ASP hike** from major Korean chipmakers, although a memory expert suggests potential increases of **30-40%** excluding HBM [2][8] - Current spot prices for DRAM are significantly higher than contract prices, with **16Gb DDR5** spot prices up **17% WoW** and **~300% QoQ** [2][6] - The **DRAM market** is expected to grow by **46% YoY** in 2025, driven by Hynix's HBM, while NAND is projected to grow at a low-single digit rate in 2025 but recover strongly in 2026 [7][8] Concerns Regarding Korean Semiconductor Supply Chain - There are concerns about the performance of **Korean small-cap semiconductor companies** such as **Seoul Semi**, **Soulbrain**, and **Hanmi Semi**, primarily due to weak LED demand and price competition from Chinese suppliers [3][8] - The impact of HBM on material demand is considered low, and capital expenditures are focused on upgrades rather than backend processes [3][8] Memory Chip Inventory Levels - As of October 2025, inventory levels for both DRAM and NAND are reported to be lower than normal, at **3-4 weeks**, compared to the typical **1-2 months** [10][11] Product Shipment Projections - Projections for various tech products indicate a recovery in shipments, particularly for **servers, SSDs, and smartphones**, with a notable CAGR of **7.3%** for 5G smartphones from 2024 to 2027 [9][8] Additional Insights - The **spot market** for memory chips continues to show robust activity, with significant price increases observed in October and early November [6][8] - The overall memory market is expected to see a blended ASP increase, with DRAM and NAND ASPs projected to fluctuate based on market conditions [7][8] This summary encapsulates the key insights and projections from the conference call regarding the NAND and DRAM markets, highlighting both opportunities and risks within the semiconductor industry.

Core Viewpoint - Goldman Sachs has raised the target price for SanDisk to $280, citing a persistent supply-demand imbalance in the NAND flash memory market that is expected to last until 2026, granting manufacturers significant pricing power and leading to a surge in profit margins [1][3][5]. Financial Performance - SanDisk's Q3 performance exceeded expectations, with revenue reaching $2.31 billion, surpassing Goldman Sachs' forecast of $2.21 billion and the market's expectation of $2.17 billion [7]. - The gross margin was reported at 29.9%, higher than the market expectation of 29.3% [8]. - Non-GAAP EPS was $1.22, significantly exceeding the market expectation of $0.90, representing a 35.6% increase [8]. Future Guidance - For Q4 2025, SanDisk's revenue guidance is set at a midpoint of $2.6 billion, compared to the market expectation of $2.37 billion [9]. - The gross margin guidance is projected at 42.0%, well above the previous quarter's 29.9% and the market expectation of 33.5%, indicating an increase of 850 basis points [9]. - Non-GAAP EPS guidance is set at $3.20, nearly 1.7 times the market expectation of $1.92 [9]. NAND Market Dynamics - The NAND flash memory market is experiencing a fundamental shift towards a sustained supply-demand imbalance, expected to last until 2026 [10][11]. - The demand for high-end memory products, driven by AI server requirements, has led to a prioritization of production capacity for these high-margin products, resulting in a shortage of NAND flash for consumer SSDs [11]. - Recent reports indicate that SanDisk has raised its NAND flash contract prices by 50% in November, with DRAM prices soaring by 171.8% year-on-year [11]. Profitability Outlook - The supply-demand imbalance translates into pricing power, which is expected to drive profit margins significantly higher [12]. - Goldman Sachs has raised its EPS forecasts for SanDisk by an average of 79% for the coming years, with 2025 EPS projected to increase from $2.88 to $4.86, a 69.2% rise [13]. - For 2026 and 2027, EPS forecasts have been raised to $19.00 and $23.25, reflecting increases of 83.6% and 85.0%, respectively [14][15]. Target Price Adjustment - Based on the optimistic outlook, Goldman Sachs has doubled its target price for SanDisk from $140 to $280, supported by significant adjustments in earnings forecasts and valuation multiples [17]. - The normalized EPS used for valuation has been increased from $7.80 to $14.00, and the P/E ratio applied to SanDisk has been raised from 18x to 20x [17]. Investment Rating - Given the substantial upside potential relative to market expectations, Goldman Sachs maintains a "Buy" rating for SanDisk [19].

Group 1 - The CPO concept has led to a decline in the ChiNext 50 Index (399673) by -2.47% as of November 10, 2025, but the ChiNext 50 ETF (159681) saw a net subscription of 62 million units, indicating strong investor interest despite market fluctuations [1] - The ChiNext 50 ETF includes key CPO stocks, leading solid-state battery companies, and internet brokerages, with its valuation positioned low among mainstream broad-based indices, suggesting potential for significant growth [1] - The storage chip sector remains active, with SanDisk significantly raising NAND flash contract prices by 50%, driven by strong sales in data center storage chips, resulting in a more than 15% increase in SanDisk's stock price on November 7 [1] Group 2 - According to Guosheng Securities, the memory supply-demand situation is tight, with multiple companies indicating continued price increases; DRAM prices are on the rise, and a structural transformation in the storage market is underway [2] - The current DRAM memory shortage is reported to be the most severe in 30 years, with NAND flash also facing shortages due to high demand from data centers, leading to a significant price increase of 50% in November [2] - SanDisk's forecast indicates that the storage supply shortage will persist at least until 2026, with the current price increase cycle in the storage sector being stronger and more prolonged than previous cycles [2] Group 3 - As of October 31, 2025, the top ten weighted stocks in the ChiNext 50 Index (399673) include CATL, Zhongji Xuchuang, Dongfang Caifu, Xinyi Sheng, Sunshine Power, Shenghong Technology, Huichuan Technology, Mindray, Yiwei Lithium Energy, and Tonghuashun, collectively accounting for 70.15% of the index [3]

Core Insights - SanDisk has raised its NAND flash contract prices by 50% in November, indicating a tightening supply in the memory market driven by AI data center demand and severe wafer shortages [2] - Major memory suppliers like Transcend, Innodisk, and Apacer Technology have reported significant revenue growth, attributing this to the prioritization of high-margin DRAM production for AI applications [3][4] - DRAM prices have surged by approximately 172% year-on-year, making it a highly valuable asset across various applications [5][6] Group 1: Market Dynamics - The price increase by SanDisk has caused disruptions in the supply chain, leading manufacturers to pause shipments and reassess pricing strategies [2] - Transcend reported a Q3 revenue of NT$41.1 billion (US$1.33 million), a 27% quarter-on-quarter increase and a 63% year-on-year increase, with a gross margin of 45% [2] - Innodisk's revenue grew by 64% year-on-year to NT$38 billion (US$1.23 million), with net profit increasing nearly 250% [2][3] Group 2: Supply Chain Challenges - The focus on high-margin DRAM production has led to shortages of older DDR4 products, further driving up prices for downstream products [3] - Major Korean memory manufacturers like Samsung and SK Hynix are currently only fulfilling 70% of orders, impacting delivery rates for cloud service providers [6] - Smaller OEMs and distributors are facing projected order fulfillment rates of only 35% to 40% by Q1 2026, which could delay product launches and threaten expected revenues [6] Group 3: Price Trends - The price of a 16GB DDR5 chip has increased from US$7 to US$13 in just six weeks, significantly affecting profit margins for memory module manufacturers [6] - A G.Skill Trident Z5 Neo RGB 32GB memory kit has seen its price rise from approximately US$106 to US$239, confirming the upward price trend in the memory market [7] - Industry executives predict that the last quarter of the year will mark the beginning of significant price increases in the memory sector, with potential shortages lasting up to a decade [7]

Group 1 - US stock market saw a significant rebound from intraday lows on Friday, with the S&P 500 rising by 0.13% and the Dow Jones increasing by 0.16%, while the Nasdaq Composite fell by 0.22%, marking its worst weekly performance since April [1] - Microsoft experienced its longest losing streak since 2011, with eight consecutive declines, while Tesla dropped over 3.6% following the approval of Elon Musk's $1 trillion compensation plan at the shareholder meeting [2] - Gold fluctuated around $4,000, ending a two-week decline, while crude oil prices briefly rose above $60 but ultimately fell by over 1.7% for the week [3] Group 2 - Bitcoin briefly dipped below $100,000 but later surged over 4.6%, while Ethereum rose by over 4.3%, reclaiming the $3,400 mark [4] - The US government shutdown situation appears to be improving, with Democrats softening their stance, although Republicans have rejected the proposal but acknowledged progress [4] - The EU AI legislation may face pressure to lower its thresholds due to collective pressure from tech giants [5] Group 3 - Google launched its next-generation AI image model, Nano Banana 2, capable of quickly generating 4K images and solving calculus problems [6] - The Chinese government issued a document to accelerate the cultivation of scenarios and promote large-scale applications in the AI field, focusing on key technology breakthroughs and standard construction [7] - A white paper on carbon peak and carbon neutrality in China indicated that the proportion of non-fossil energy consumption is expected to increase from 16.0% in 2020 to 19.8% in 2024 [8] Group 4 - The People's Bank of China increased its gold reserves by 30,000 ounces in October, marking the 12th consecutive month of increases [10] - China's October CPI rose by 0.2% year-on-year, with the core CPI reaching its highest level since March 2024, while the PPI saw its first year-on-year increase of the year [11] Group 5 - Various brokerage strategies are focusing on year-end style rebalancing, with analysts suggesting that sectors like new energy, pharmaceuticals, and food and beverage may show weaker performance as they face profit-taking pressures [12] - Analysts recommend focusing on sectors with independent logic and improving ROE, such as chemicals, non-ferrous metals, and electric new energy, which are at historical low points in profitability and industry prosperity [13] Group 6 - NAND flash memory prices are set to increase significantly, with SanDisk raising contract prices by up to 50%, leading to some manufacturers pausing shipments to reassess pricing [14] - The flu activity in China has risen sharply, with most provinces entering the flu epidemic period, prompting increased production of antiviral medications [16] - The Ministry of Agriculture and Rural Affairs released guidelines for building a smart agriculture standard system, aiming for a comprehensive standard system by 2030 [17] - The smart agriculture market in China is projected to exceed 100 billion yuan in 2024, growing by 11.7% year-on-year, driven by policy support and increased fiscal investment [18] Group 7 - Several companies announced significant transactions, including Suzhou planning to acquire 100% of Dongjin Hangke for 250 million yuan, and Guocheng Mining proposing to pay 3.168 billion yuan for a 60% stake in Guocheng Industrial [19] - Huadian Energy plans to invest 12.043 billion yuan in a wind power project, while Huadian Science and Technology signed a contract for a major offshore wind power project [20] - Fangzheng Technology is investing 1.364 billion yuan to expand its AI production base in Chongqing, addressing capacity bottlenecks in high-end products [21]

Core Insights - The storage chip market is expected to see a price increase of over 300% by 2025, surpassing the price increases of gold and AI graphics cards [1][3] - Major manufacturers like Samsung, SK Hynix, and Micron are experiencing significant revenue and profit growth due to rising storage chip prices, with projections indicating a further 50% increase in prices by 2026 [3][5] Market Dynamics - The surge in storage chip prices is primarily driven by increased demand from AI applications, leading to a supply-demand imbalance as manufacturers stockpile chips in anticipation of further price hikes [5][7] - The transition of manufacturers from DDR to HBM chips, along with the increased demand for SSDs in servers, has contributed to the price escalation in NAND and DRAM chips [5][7] Impact on Consumer Electronics - The rising costs of storage chips are putting pressure on consumer electronics manufacturers, leading to price increases for products such as smartphones and PCs, with companies like Xiaomi and Apple indicating that they will have to raise prices due to higher memory costs [7][9] - The increased costs associated with storage chips are expected to be passed on to consumers, impacting the overall pricing of electronic products [7] Opportunities for Chinese Manufacturers - Chinese companies like Yangtze Memory Technologies and ChangXin Memory Technologies are gaining market share in the NAND and DRAM sectors, with their global market share exceeding 10%, allowing them to benefit from the current price increases [9]

Report Industry Investment Rating No relevant content provided. Core View of the Report After a continuous upward trend, recent hot sectors have been rotating rapidly, leading to a decrease in market risk appetite. The short - term index faces certain uncertainties. However, in the long - run, the policy support for the capital market remains unchanged, and the general strategy is to go long on dips [11][12]. Summary by Directory 1. Week - on - Week Assessment and Strategy Recommendation - **Important News**: President Xi Jinping will visit South Korea from October 30 to November 1; the Fourth Plenary Session of the 20th Central Committee of the Communist Party of China put forward the main goals for economic and social development during the 15th Five - Year Plan period; Vice - Premier He Lifeng will lead a delegation to Malaysia for economic and trade consultations with the US; the Chief Commercial Officer of Micron Technology said that the DRAM memory supply situation will be more severe in 2026 [11]. - **Economic and Corporate Earnings**: In September 2025, the industrial added value of large - scale industries increased by 6.5% year - on - year, fixed - asset investment decreased by 0.5%, social consumer goods retail sales increased by 3.0%, and the GDP growth rate in Q3 was 4.8%. The official manufacturing PMI was 49.8, non - manufacturing PMI was 50.0. M1 growth rate was 7.2%, M2 was 8.4%. The social financing increment was 3.53 trillion yuan, with a year - on - year decrease of 2339 billion yuan. Exports denominated in US dollars increased by 8.3% year - on - year [11]. - **Interest Rate and Credit Environment**: This week, the 10 - year Treasury bond rate and credit bond rate both declined, the credit spread narrowed, and liquidity remained loose [11]. - **Trading Strategy Recommendations**: Hold a small number of IM long positions in the long - term as the valuation is at a moderately low level and IM has long - term discounts; hold IF long positions for 6 months as a new round of interest rate cuts may benefit high - dividend assets [13]. 2. Spot and Futures Market - **Stock Index Performance**: The Shanghai Composite Index rose 2.88% to 3950.31 points, the Shenzhen Component Index rose 4.73% to 13289.18 points, and other major indices also showed significant increases [15]. - **Futures Contract Performance**: All major futures contracts, such as IF, IH, IC, and IM, showed varying degrees of increase in price and trading volume [16]. 3. Economic and Corporate Earnings - **Economic Indicators**: In Q3 2025, the GDP actual growth rate was 4.8%. In September, the official manufacturing PMI was 49.8, consumer growth rate was 3.0%, exports denominated in US dollars increased by 8.3% year - on - year, and investment growth rate in August was - 0.5% [33][36][39]. - **Corporate Earnings**: In the 2025 semi - annual report, the year - on - year growth rate of operating income was flat, with a 0.4% quarter - on - quarter increase; the year - on - year growth rate of net profit was 2.5%, with a 1.0% quarter - on - quarter decline [42]. 4. Interest Rate and Credit Environment - **Interest Rate**: The 10 - year Treasury bond rate and 3 - year AA - corporate bond rate showed certain trends, and the liquidity remained loose [45]. - **Credit Environment**: In September 2025, M1 growth rate was 7.2%, M2 was 8.4%, and the social financing increment was 3.53 trillion yuan, with a year - on - year decrease of 2339 billion yuan [57]. 5. Capital Flow - **Inflow**: This week, 135.44 billion shares of equity - oriented funds were newly established, and the two - market margin trading balance reached a new high of 24339 billion yuan, with an increase of 210.84 billion yuan [63][66]. - **Outflow**: This week, major shareholders had a net reduction of 74.37 billion yuan, and the number of IPO approvals was 2 [69]. 6. Valuation - **Price - to - Earnings Ratio (TTM)**: The PE of SSE 50 was 12.31, CSI 300 was 14.56, CSI 500 was 34.39, and CSI 1000 was 47.02 [73]. - **Price - to - Book Ratio (LF)**: The PB of SSE 50 was 1.34, CSI 300 was 1.51, CSI 500 was 2.29, and CSI 1000 was 2.50 [73].

Investment Rating - The report maintains a "Buy" rating for the company [6] Core Views - The company has shown significant revenue growth, with a 59.9% year-on-year increase in revenue for the first three quarters of 2025, reaching 26.4 billion yuan. However, the net profit attributable to the parent company decreased by 1.4% year-on-year to 360 million yuan [1] - The company is expected to benefit from the rising demand for enterprise-level storage solutions, price increases, and domestic production initiatives, particularly in the fourth quarter of 2025 [2] - The acquisition of AMD distribution rights enhances the company's competitive edge and allows it to provide comprehensive solutions in the AI and high-performance computing sectors [3] Financial Performance Summary - For Q3 2025, the company reported a revenue of 9.28 billion yuan, a year-on-year increase of 6.6% and a quarter-on-quarter increase of 0.6%. The net profit for the same quarter was 200 million yuan, showing a year-on-year decrease of 3.1% but a significant quarter-on-quarter increase of 42.8% [1] - The gross margin for Q3 2025 was 4.0%, a decrease of 0.5 percentage points year-on-year but an increase of 0.8 percentage points quarter-on-quarter. The net margin was 2.1%, down 0.2 percentage points year-on-year but up 0.6 percentage points quarter-on-quarter [1] - Revenue projections for 2025, 2026, and 2027 are estimated at 38.9 billion yuan, 58.0 billion yuan, and 79.7 billion yuan, respectively, with net profits expected to reach 605 million yuan, 1.2 billion yuan, and 2.0 billion yuan [3][5]

Market Overview - The Hong Kong stock market indices continued to rise, with the Hang Seng Index up 0.65%, returning above 26,000 points, the Hang Seng China Enterprises Index up 0.76%, and the Hang Seng Tech Index up 1.26% [1][2]. Technology Sector - Major technology stocks mostly increased, with NetEase rising over 2%, Alibaba and Kuaishou nearly 2%, while Xiaomi fell over 1% [2][3]. - Apple suppliers' stocks surged following Apple's record high stock price, with GoerTek rising nearly 6% [2][6]. Semiconductor and Chip Sector - Semiconductor and chip stocks continued to rise, with companies like Beike Micro and Horizon Robotics increasing over 4% [2][6]. Insurance Sector - Insurance stocks collectively rose, with China Life increasing over 6% and other major insurers like New China Life and Ping An also seeing gains [8][9]. Lithium Battery Sector - Lithium battery stocks saw a boost, with BYD Electronics and CATL both rising over 3% [10][11]. Wind Power Sector - Wind power stocks were active, with companies like Dongfang Electric and Goldwind Technology showing increases [12][13]. Gold Sector - Gold stocks experienced a pullback, with China Silver Group dropping over 6% and other gold companies following suit [14][15]. New Listings - Chinese e-commerce SaaS ERP provider Jushuitan debuted on the Hong Kong Stock Exchange, initially surging over 28% and closing up 23.86% [16][20]. Logistics Sector - Aneng Logistics saw a strong rebound, with its stock price rising nearly 18% during the day [21][24].

Core Viewpoint - The AI wave is driving the storage chip market into a strong upward cycle, with demand surging and supply lagging, leading to a seller's market where DRAM inventory has dropped to below two weeks, and prices have increased by up to 25% [1][3][4] Group 1: Market Dynamics - The storage industry is in the early to mid-stage of a robust upward cycle, with the best price increases yet to come, urging investors not to exit prematurely due to fear of heights [2][8] - A channel survey indicates that due to a surge in orders from U.S. cloud service customers, storage chip manufacturers have reported price increases of up to 25% for DRAM and NAND flash for Q4 2025, indicating a strong shift towards a seller's market [3][4] - The current supply-demand imbalance for traditional memory is more severe than expected, with DRAM manufacturers' inventory plummeting to below two weeks and NAND flash inventory falling below long-term averages [4][5] Group 2: Price Projections - The new capacity is expected to catch up with demand in 4 to 6 quarters, with supply lagging issues likely to persist, prompting customers to build buffer inventories, further solidifying the seller's market [5][10] - Current prices are still far from historical peaks, with potential for prices to double, especially in the context of AI-driven demand reshaping the global storage market [6][10] Group 3: Investor Sentiment - The report addresses the common "fear of heights" among investors, stating that new highs often lead to even higher peaks, supported by strong earnings momentum rather than just AI narratives [8] - The analysis highlights that stronger earnings revisions lead to stronger stock returns, as evidenced by the significant price increases of SK Hynix and Samsung Electronics, with SK Hynix's stock rising approximately 140% due to a 62% upward revision in earnings expectations [8]