In-Depth Analysis of the Rationality of Cambricon's 630 Billion RMB Valuation

Now I will conduct a comprehensive analysis based on the acquired data to provide you with a detailed valuation assessment and investment value analysis.

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Based on the latest trading data, Cambricon (688256.SS) currently has a market capitalization of

, equivalent to approximately , which is highly consistent with the valuation in the “2025 Hurun China Top 50 Artificial Intelligence Enterprises” list released by Hurun Research Institute [0]. The company’s stock closed at 1420.49 RMB, with a current P/E (price-to-earnings ratio) as high as , P/B (price-to-book ratio) reaching , and P/S (price-to-sales ratio) an astonishing [0][1].

In terms of stock performance, Cambricon has risen 129.77% in the past year, with an even more impressive 143.81% gain in the last six months, and a cumulative increase of over 2328% in three years, demonstrating strong market momentum [1]. However, this staggering valuation level has also sparked widespread market debate about its rationality.

Cambricon’s revenue growth is nothing short of astonishing: in 2024, the company achieved revenue of 1.174 billion RMB, a year-on-year increase of 66%; in the first three quarters of 2025, it achieved revenue of 4.607 billion RMB, a year-on-year surge of 2386.38% [2][3]. Looking at quarterly performance, the company’s revenue grew quarter by quarter from 989 million RMB in Q4 2024 to 1.769 billion RMB in Q2 2025, demonstrating strong growth momentum [3].

More importantly, the company has successfully turned a profit: in the first three quarters of 2025, net profit attributable to parent company shareholders reached 1.605 billion RMB, with single-quarter net profit reaching 683 million RMB in Q2 2025, and net profit margin rising to 32.8% [2][3]. This marks Cambricon’s first sustained profitability since its listing, signifying that the company is transitioning from the “strategic investment phase” to the “commercialization harvest phase” [4].

In Q2 2025, the company’s net cash flow from operating activities was 2.311 billion RMB, a significant improvement compared to -1.399 billion RMB in Q1 [4]. As of Q3 2025, the company’s inventory reached 3.7 billion RMB, and monetary funds reached 5.2 billion RMB, with the balance sheet health continuously improving [3].

Analysis using the DCF valuation model shows that Cambricon’s intrinsic value is negative in three scenarios: -23.93 RMB in the conservative scenario, -36.94 RMB in the base scenario, and -94.59 RMB in the optimistic scenario, all of which deviate significantly from the current stock price of 1420 RMB [0].

The underlying reason for this result is that Cambricon is still in a high-growth phase, with a historically negative EBITDA margin (average -125.8%) and negative free cash flow (latest FCF is -1.984 billion RMB). Traditional DCF models struggle to effectively value high-growth technology companies that have not yet achieved stable profitability [0]. This also explains why the market mostly uses P/S (price-to-sales ratio) or growth-oriented valuation methods.

According to industry data, China’s AI chip market showed a clear oligopolistic pattern in 2024: NVIDIA held

of the market share with full-function GPUs, HiSilicon (Huawei) held with ASIC chips, and AMD held with GPGPUs [5]. In the global market, NVIDIA’s share exceeds 80%, occupying an absolute monopoly position [5].

Company	Valuation/Market Cap	Technical Route	Market Share	Development Stage
HiSilicon (Huawei)	Unlisted	ASIC/DSA	21.4%	Large-scale Mass Production
Cambricon	630 billion RMB	ASIC/DSA	~1-2%	Commercial Breakthrough
Moore Threads	310 billion RMB	Full-Function GPU	<1%	Early Stage of Scale-up
Muxi	250 billion RMB	GPGPU	~1%	Early Stage of Scale-up
Biren Tech	~100 billion HKD	GPGPU	0.2%	Initial Listing Stage
Kunlun Chip	~20 billion RMB in Revenue	ASIC/DSA	~2%	Independent Operation

China’s AI chip companies are mainly divided into two technical camps: one follows the full-function GPU route (e.g., Moore Threads), competing directly with NVIDIA; the other follows the ASIC/DSA dedicated chip route (e.g., Cambricon, HiSilicon), emphasizing energy efficiency ratio and scenario-specific optimization [6]. The latter has advantages in faster commercialization under the background of domestic substitution.

1. Sector Scarcity
   : Cambricon is a rare listed domestic AI chip company, with a strong capital scarcity premium [3]
2. Performance Turnaround
   : The substantial growth in revenue and profit in 2025 validates its commercialization capabilities
3. Policy Support
   : Policy dividends from domestic substitution continue to be released, and AI chips are a strategic industry
4. Market Sentiment
   : The AI boom has pushed up the valuation center of the entire sector

1. High Customer Concentration
   : The top five customers contribute 94.6% of revenue, with the largest customer accounting for 79% [3]
2. Valuation Bubble Risk
   : 318x PE and 106x PS deviate significantly from traditional valuation ranges
3. International Competitive Pressure
   : NVIDIA recently obtained US export approval for H200 chips to China, which will impact domestic players [7]
4. Technology Gap
   : Domestic GPUs generally target NVIDIA’s previous-generation H100 product, with an obvious technological generation gap [7]

According to analyst forecasts, Cambricon’s revenue is expected to reach 6.771 billion RMB, 13.535 billion RMB, and 23.004 billion RMB in 2025-2027, with net profit attributable to parent company shareholders reaching 2.106 billion RMB, 4.869 billion RMB, and 8.733 billion RMB respectively [3]. If these targets are achieved, the current valuation will be gradually digested by performance.

• Risk of AI demand falling short of expectations
• Risk of high customer concentration
• Risk of supply chain instability
• Risk of divergence between valuation and performance
• Risk of changes in international chip control policies [3]

: Cambricon’s 630 billion RMB valuation is built on three pillars: “scarcity of domestic AI chips + explosive performance growth + policy support expectations”. From a traditional financial valuation perspective, it is obviously overvalued, but from the logic of sector investment and future growth potential, there is certain rational support. : if performance can maintain high growth, the current valuation is expected to be digested over time; if growth falls short of expectations, investors need to be alert to the risk of a valuation bubble.

: China’s AI chip industry is in a critical transition stage from the “dormant period” to the “breakthrough period”. In the short term, NVIDIA will still dominate the global market, but domestic players have shown competitive advantages in the ASIC/DSA niche track. With the successive listings of companies such as Moore Threads, Muxi, and Biren Tech, the domestic AI chip camp is forming a joint force and is expected to gradually increase its market share in the next 3-5 years.

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[0] Jinling API Market Data and DCF Valuation Analysis
[1] Jinling API Company Profile and Financial Indicators
[2] Soochow Securities “Cambricon-U (688256) 2025 Q3 Earnings Review” (https://pdf.dfcfw.com/pdf/H3_AP202510201765235309_1.pdf)
[3] Soochow Securities “Cambricon-U (688256) 2024 Annual Report & 2025 Q1 Earnings Review” (https://pdf.dfcfw.com/pdf/H3_AP202504251662074955_1.pdf)
[4] China Fund News “The First Half of 2025 Marks a Historic Moment for the Three Giants of Domestic Chip Design” (https://www.chnfund.com/article/AR62903dd9-f6bc-25e5-d479-3a1c126d778d)
[5] Securities Times “Domestic GPU Manufacturers Race to Go Public, None Have Exceeded 1% Market Share” (https://www.stcn.com/article/detail/3546594.html)
[6] The Paper “After Four Years of Preparation, Robin Li Unveils a Big Move” (https://m.thepaper.cn/newsDetail_forward_32363446)
[7] Huxiu “History is on the Side of China’s GPUs” (https://www.huxiu.com/article/4826460.html)