Six months of skyrocketing profits totaling 50 billion yuan: Changxin Technology’s turnaround from a "money shredder" to a "money printer"

``` A quarterly profit of 24.7 billion yuan, with half-year profits approaching 57 billion yuan—this chip company, once suffering years of massive losses and mocked by the market as a “money-burning machine”, is now staging the most astounding profit turnaround in China’s tech history. On May 17, Changxin Technology (CXMT) filed an updated IPO prospectus for the STAR Market, and a series of numbers shook the entire capital market: In the first quarter of 2026, the company’s revenue reached 50.8 billion yuan, a year-on-year surge of 719%; net profit attributable to the parent after deducting non-recurring profits and losses was 26.34 billion yuan, up 1993.41% year-on-year; the company expects first half revenues of 110-120 billion yuan, up 612.53% to 677.31% year-on-year; net profit attributable to the parent is estimated at 50 to 57 billion yuan, up 2244% to 2544% year-on-year. Just how extraordinary are these results? A horizontal comparison makes it clear. Among A-share non-financial companies, only PetroChina, China Mobile, and CNOOC achieved over 100 billion yuan in net profits in 2025; Kweichow Moutai earned over 80 billion, CATL over 70 billion, and the sixth-place National Energy Group earned only 52.9 billion. Yet, with just half a year’s net profit attributable to its parent, CXMT already matches the profits of the National Energy Group, positioning itself among the top six A-share non-financial companies. Even more jaw-dropping is that, extrapolating the data linearly, CXMT’s 2026 net profit is expected to break through 100 billion yuan. Thus, this chip company’s annual profitability is catching up with the profit levels of former state-owned oil giants. Yet, just over a year ago, this company was still a “money-burning machine” in every sense. ### The Former Abyss of Loss: Burning Through 36.65 Billion in Three Years Reviewing CXMT’s public financial data: It lost 16.34 billion yuan in 2023, 7.145 billion in 2024, and as of December 31, 2025, accumulated losses had reached as high as 36.65 billion yuan. In nearly a decade, CXMT had poured nearly every cent of financing into the bottomless pit of chip manufacturing. Now, how did this “money-burning machine” become a “money printer” earning nearly 400 million yuan a day—in less than half a year? The answer lies in two keywords: AI, and the chip shortage. ### An Epic Supercycle: AI Is “Devouring” Memory The world is experiencing an epic memory chip cycle. The root of this super boom is the “violent consumption” of memory by AI large models. Every inference of an AI model is essentially massive data fetching between the GPU and memory. A single AI server’s DRAM demand is 8 to 10 times higher than that of a traditional server. As global cloud providers and AI computing infrastructure scale up rapidly, DRAM demand is seeing explosive, structural growth. Meanwhile, the big three—Samsung, SK Hynix, and Micron—are shifting much of their advanced capacity to more profitable HBM (High Bandwidth Memory), severely squeezing resources for production lines of general-purpose chips like DDR4 and DDR5. This extreme supply-demand mismatch has driven DRAM prices to historical highs. According to TrendForce data, in Q1 2026, DRAM contract prices climbed 93% to 98% quarter-on-quarter; Q2 maintains an expected increase of 58% to 63%. The National Development and Reform Commission’s price monitoring center shows that as of January 2026, mainstream DRAM product prices hit their highest levels since 2016. The three giants—Samsung, SK Hynix, Micron—have all announced full sales for their 2026 output. Industry organizations predict that this memory cycle may last until 2030, with a supply gap exceeding 20%. ### Optimum Volume and Price: CXMT Catches the Wave In this epic memory supercycle, CXMT not only seized the opportunity but also maximized industry dividends through years of strategic planning. Founded in 2016, CXMT is currently the only mainland Chinese IDM company (integrated design, manufacturing, and testing) that has achieved large-scale DRAM production. The company operates three 12-inch fabs in Beijing and Hefei, with capacity utilization reaching 94.63% in 2025. On the product side, CXMT has completed a comprehensive upgrade from DDR4 to DDR5 and from LPDDR4X to LPDDR5/5X. The continual push of high-end products has directly amplified profit elasticity amid price hikes. Market share-wise, per Omdia data, CXMT’s global DRAM market share climbed to 7.67% in Q4 2025 (China’s number one, world’s fourth). From 3.97% in Q2 2025 to 7.67% in Q4—within half a year, its market contribution nearly doubled. The result: Both volume and price soared, leading to an explosion in profits. ### Zhu Yiming’s Ten-Year Gamble: No Profit, No Pay CXMT’s journey can’t be separated from one key figure: Chairman Zhu Yiming. As the founder of GigaDevice, in 2016 Zhu made an incomprehensible decision for the industry—he abandoned the stable path of a chip design company and bet everything on founding CXMT in Hefei, wagering on domestic DRAM. How hard is this path? DRAM is the world’s most fiercely competitive chip sector; Samsung, SK Hynix, and Micron held over 90% global market share, leaving almost no room for new entrants. Even worse, DRAM manufacturing is extremely capital-intensive—every 12-inch fab requires massive investment running into billions of dollars. For a long time, Zhu and CXMT were simply filling a bottomless pit with money. Back then, Zhu made a military pledge: Before CXMT turned a profit, he would take no salary or bonus whatsoever. This promise has now been more than fulfilled. ### Valuation Controversy: One Trillion or Two? With performances so explosive, how much is CXMT actually worth? Per the current IPO plan, CXMT aims to raise 29.5 billion yuan on the STAR Market, with the post-issue total share capital no less than 10%, implying a valuation around 295 billion yuan. The planned IPO fundraising is also the highest in STAR Market history (SMIC planned 20.7 billion yuan in 2020, and actually raised 53.2 billion). Currently, market valuation expectations for CXMT are around 1 trillion yuan in the short term and 2 trillion yuan long term. Based on an estimated 100 billion yuan in attributable net profits by end-2026, there is ample support for a trillion-yuan level market cap. Of course, controversy remains. The cyclical nature of DRAM is inescapable—CXMT posted heavy losses last year but huge profits this year. Once the supercycle ends and prices fall, profits could shrink dramatically. However, some argue that the core logic of this cycle has shifted from “consumer electronics seasonality” to “structural AI-driven demand,” making it far more sustainable than before. In addition, CXMT’s scarcity as China’s sole DRAM “seedling” brings with it an unavoidable scarcity premium in pricing. ### Textbook-Level Financial Turnaround From an accumulated loss of 36.65 billion to a half-year profit of 50 billion, CXMT completed a textbook-level financial turnaround in less than half a year. But behind this reversal is a decade of relentless capital investment, technology accumulation, and strategic persistence. Zhu Yiming and the CXMT team gambled on more than an industry cycle—they placed their bets on China's bid to carve out a place in the global DRAM landscape. Daily profits nearing 400 million yuan are both a gift of the moment and a reward for a decade of perseverance. When CXMT’s IPO finally rings the bell, the answer it gives to the capital market may speak louder than any research report. Risk Warning and Disclaimer The market is risky, and investment must be cautious. This article does not constitute individualized investment advice, nor does it take into account the special investment goals, financial circumstances, or needs of any particular user. Users should consider whether any opinions, views or conclusions contained herein are consistent with their specific circumstances. Invest accordingly at your own risk. ```