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December 23, the high-profile "first stock of AI chips" Cambrian (688256. SH) share price hit a new high intraday, once rising to a high of 700 yuan per share. However, Cambrian failed to maintain a continuous upward trend, falling 4.02% on the day, and the stock price closed at 648.75 yuan per share. Since the "924" market, Cambrian's stock price has repeatedly hit new highs. Since the beginning of the year, Cambrian's share price has risen by 380.7%, a maximum increase of more than 7 times from the low of 95.85 yuan in February, ranking first in the A-share market. The latest market value is 270.8 billion yuan, surpassing Baidu. Cambrian's predecessor is a 10-member academic team of "exploring the intersection of processor architecture and AI" established by the Institute of Computing Technology of the Chinese Academy of Sciences in 2008. The main business is the R&D, design and sales of artificial intelligence core chips used in various cloud servers, edge computing equipment and terminal equipment. The Cambrian surge has once again enriched the myth of A-share wealth. The actual controller of Cambrian is Chen Tianshi, born in 1985, and entered the Institute of Computing Technology of the Chinese Academy of Sciences after graduating from the School of Computer Science of the University of Science and Technology of China. In 2016, affected by the international environment, a large number of AI chip companies emerged in China, and Chen Tianshi also officially founded Cambrian. According to the third quarterly report, Chen Tianshi holds 119.5 million shares of Cambrian, accounting for 28.63% of the total share capital, and is the company's largest shareholder. Beijing Zhongke Computing Asset Management Co., Ltd., a wholly-owned subsidiary of the Institute of Computer Technology of the Chinese Academy of Sciences, holds 15.73% of the equity of Cambrian and is the second largest shareholder of the company. In the 2024 Hurun Report, Chen Tianshi ranked 140th with a value of 32 billion yuan, becoming the richest man in Nanchang. According to the latest market value of Cambrian, the corresponding market value of Chen Tianshi's shares in Cambrian has reached 77.5 billion yuan. Cambrian's high market capitalization has also caused many investors to question that the company's market capitalization at this stage does not match its performance. Cambrian has been established for 8 years, and has not yet achieved profitability, as of the third quarter of this year, Cambrian has accumulated losses of more than 5.5 billion yuan.

The stock price has risen by more than 1000% in two years, with the halo of AI chips on its head, and Cambrian has been favored by many capitals after its establishment. In several rounds of financing before the listing, it has successively received investment from well-known institutions such as iFLYTEK, SDIC Ventures, Alibaba, Lenovo, CITIC Securities, CMB International, China Venture Capital, and Guoxin Holdings. In July 2020, Cambrian landed on the Science and Technology Innovation Board at the speed of light after only 4 months of approval, and its stock price rose 229.86% on the first day of listing. However, after the listing, Cambrian's share price fell again and again, and in 2022, Cambrian's share price suffered a "break", once falling to 46.59 yuan per share. With the explosion of the concept of ChatGPT, Cambrian will usher in a wave of growth in 2023. Seeing the stock price recovering, Cambrian's original shareholders began to sell off when the stock price recovered. In September last year, SDIC Venture Fund, Paleozoic Venture Capital, Ningbo Hangao, Nanjing Zhaoyin, Hubei Zhaoyin, etc. have completed the reduction of Cambrian, and the price range of the reduction is concentrated between 77.03 yuan/share and 266.16 yuan/share, with a total amount of more than 4 billion yuan. But the reversal came quickly, and since the beginning of 2023, the Cambrian has risen by 1089%. For the continuous rise of Cambrian in this round, the market has different opinions. Compared with the popular concept of the first stock of AI chips on the Science and Technology Innovation Board, the market is more inclined to be promoted by public funds, and there is even a saying that Cambrian was raised to the peak of market value by funds. Wind data shows that as of the end of September this year, among the top ten liquid shareholders of Cambrian, ChinaAMC SSE Science and Technology Innovation Board 50, E Fund SSE Science and Technology Innovation Board 50, and Huaxia Guoxi Semiconductor Chip have all increased their positions in Cambrian. In addition, Huatai Pineapple CSI 300 has also become one of the top 10 liquid shareholders. To some extent, the passive funds of ETFs have contributed a lot to Cambrian's stock price. Cambrian has been a constituent stock of many important indices such as the Science and Technology Innovation 50 Index, CSI 300 Index, CSI A500 Index, and CNI Chip Index, so it is held by many passive funds tracking the index. On November 29, China Securities Index Company announced the regular adjustment plan of the SSE 50 index sample, and Cambrian was included in the SSE 50 index. According to the research of Guosen Securities, based on the adjustment of index constituents with a tracking passive fund size of more than 10 billion yuan, Cambrian's inclusion in the SSE 50 Index is expected to be 3.567 billion yuan. If the possibility of inclusion in the FTSE China A50 Index is considered next, there will be more passive incremental funds.

According to the rules, the SSE 50 sample must be selected as a SSE 180 constituent stock, and Cambrian has met this criterion on November 24, 2023. In addition, it is also necessary to conduct a comprehensive ranking according to the average daily total market value and average daily turnover in the past year, and select the top 50 stocks to be included in the SSE 50 list. From the point of view of rules, it is understandable that Cambrian is included in the Shanghai Stock Exchange 50 Index, but Cambrian's performance has attracted some investors to question it, believing that Cambrian's revenue level and consecutive years of losses do not match the market value. The income structure of the Cambrian period has undergone considerable adjustments. Prior to 2019, with the cooperation of Huawei HiSilicon, the Cambrian terminal intelligent processor IP business accounted for 99% of the company's revenue, becoming a pillar source of revenue for the company. After that, the cooperation between Huawei and Cambrian was terminated, and in 2019, the company's terminal intelligent processor IP licensing business revenue was 68.7712 million yuan, accounting for 15.49% of the total revenue. At present, this business is basically zero. In recent years, Cambrian's main focus has gradually shifted to the intelligent computing cluster system business, which contributed more than 85% of revenue in 2023. Under the company's strategic adjustment, Cambrian's revenue performance is relatively stable, but it has not been able to achieve profitability. As of the end of September this year, the cumulative loss since the establishment of Cambrian reached 5.69 billion yuan. The main reason for Cambrian's performance loss is the high investment in research and development. From 2020 to 2022, the company's R&D expenses will be 768 million yuan, 1.136 billion yuan, and 1.523 billion yuan respectively, accounting for 167.41%, 157.51%, and 208.92% of revenue, respectively. Last year, Cambrian's R&D expenses decreased by 26.63% to RMB1.118 billion, and the company's R&D personnel also decreased by 38% to 752. The financial report shows that in the first three quarters of this year, Cambrian achieved operating income of 185 million yuan and a net loss of 724 million yuan, compared with the net loss of 808 million yuan in the same period last year. However, there are still institutions that are optimistic about Cambrian's performance this year. In the third quarter of this year, Cambrian's advance payment was 854 million yuan, a year-on-year increase of 543.95%; The inventory was 1.015 billion yuan, a year-on-year increase of 310.85%. Debang Securities released a research report in November, saying that from the company's financial data over the years, the fourth quarter is usually the delivery period and performance release period of Cambrian, and the substantial growth of the company's inventory and prepaid accounts is a positive guide for the company's fourth quarter performance, with the gradual carryover of inventory and prepaid accounts to costs, the company's annual revenue in 2024 can be expected.