(Yicai) Jan. 16 -- Cambricon, a Chinese artificial intelligence chip developer, expects to report its first profit in the fourth quarter of last year.

The Beijing-based firm told Yicai that while revenue growth and loss reduction depend on the success of market expansion efforts, the final report will confirm whether the fourth quarter was indeed profitable.

Founded in 2016, Cambricon represents one of China's strongest contenders in developing domestic AI chips to power future technologies such as connected cars, reflected in its impressive stock market performance since its Shanghai listing in July 2020.

In its 2024 guidance released yesterday, the startup projected a net profit of CNY240 million to CNY330 million (USD32.7 million to USD45 million) for the fourth quarter of last year. After deducting non-recurring gains and losses, the company could report anything from a CNY90 million net loss to a CNY80 million profit (negative USD11.9 million to positive USD10.6 million). In the first three quarters of last year, net losses totaled around CNY720 million, expanding to CNY860 million after excluding one-off items.

For the full year, the semiconductor company expects revenue between CNY1.1 billion and CNY1.2 billion (USD150 million to USD163.7 million). Net losses are forecast at CNY390 million to CNY480 million, representing a 45 to 53 percent improvement from 2023. After deducting non-recurring items, the net loss could reach CNY940 million, still 10 percent better than the previous year.

GF Securities predicted in a recent note that 2025 will be Cambricon's first profitable year. However, given the company's expected increase in research and development investment for AI chips and software, net profit is likely to remain within certain limits.

Everbright Securities noted that in the third quarter of last year, Cambricon's prepaid accounts and inventory reached their highest levels since the company's public listing, indicating improved supply chain operations and delivery capabilities.

Despite the improving performance outlook, Cambricon's shares [SHA: 688256] fell 14.65 percent to CNY594 (USD81) today. Nevertheless, the stock has nearly quadrupled in value over the past 12 months.

Editor: Emmi Laine