As of the close of trading on January 8, Cambrian (SH688256) share price hit a new high again on the basis of the previous trading day, closing at 726.00 yuan / share, an increase of 1.11%, with a market value of 303.1 billion yuan. On the same day, the AI chip industry continued to perform, Haiguang Information (SH688041, share price 149.89 yuan, market value 348.4 billion yuan) rose by 1.55%, and Montage Technology (SH688008, stock price 66.82 yuan, market value 76.495 billion yuan) rose by 0.62%.

Cambrian's share price rose this time, extending its strong rally since the end of 2024. Since being included in the Shanghai 50 Index in November 2024, the company's share price has fluctuated higher.

The reporter of "Daily Economic News" noticed that as the "first stock of AI chips", since its listing in 2020, Cambrian's stock price trend has been attracting attention, and its fluctuating performance also explains the high volatility of the AI chip industry to a certain extent. Although Cambrian has been mired in performance losses, slowing revenue growth, and dependence on large customers in recent years, the continued popularity of the AI concept and technological leadership have made Cambrian regain the favor of institutional funds at the end of 2024.

It has continued to climb since the end of 2024

On the news side, from January 7 to 10, Eastern time, the global technology event CES (International Consumer Electronics Show) was held in Las Vegas, USA, which is the vane of global technological innovation and consumer electronics industry. On the morning of January 7, Beijing time, Nvidia CEO Jensen Huang delivered a speech, and in addition, Intel's first Intel 18A process chip was unveiled at the meeting, confirming the release in the second half of the year. As of the close of trading on January 7, the AI chip sector was among the top gainers.

Since the end of 2024, Cambrian stock prices have continued to climb. On November 29, 2024, after Cambrian was transferred to the Shanghai Stock Exchange 50 Index, its market value went straight to 300 billion yuan. Wind data shows that in the whole of 2024, Cambrian has a total of 119 trading days of stock price gains.

It is worth noting that before this round of stock price surges, Cambrian experienced a "cold winter".

The reporter of "Daily Economic News" noticed that at the end of September 2023, Cambrian announced that from March to June of that year, its venture capital shareholder SDIC Venture Fund "cleared" its holdings of about 7.3987 million shares, accounting for 1.776% of the company's total share capital, and reduced its holdings by about 1.482 billion yuan. At that time, the AI track was attracting attention due to the popularity of generative artificial intelligence, and the reduction of Cambrian Venture Capital shareholders became the focus of market controversy, and Cambrian's stock price also fell all the way at the end of 2023.

This is not the first time that Cambrian has faced a major shareholder change, in the third quarter of 2022, iFLYTEK disappeared from Cambrian's top ten circulating shareholders; When the third quarter report of 2023 was disclosed, Alibaba Venture Capital also withdrew from the top 10 list.

In addition, on January 30, 2024, Cambrian issued a performance forecast, and although the loss has narrowed, it has not shown signs of turning around. After the announcement, Cambrian's share price fell below the $100 mark in February 2024.

After landing in the capital market, Cambrian's share price performance has always been accompanied by the ups and downs of market confidence.

On the first day of listing on July 20, 2020, Cambrian's share price rose 229.86% to 212.4 yuan / share, and then ushered in a two-year shock downturn, falling as low as 46.59 yuan / share in April 2022. At the end of 2022, the AI field ushered in a new round of capital boom due to the global explosion of Chat GPT, and as a representative enterprise of the domestic AI chip industry, Cambrian's share price rebounded, and the stock price once exceeded 200 yuan per share in 2023. However, this trend has also not been sustained, and a correction will begin at the end of 2023 until the beginning of 2024. Today, Cambrian's share price has climbed from $100 at the beginning of the year to more than $700 today.

At the same time, as the AI sector strengthened again, a large number of institutional funds accelerated their inflows. Wind data shows that as of the end of September 2024, among the top ten circulating shareholders of Cambrian, funds such as ChinaAMC SSE Science and Technology Innovation Board 50, E Fund SSE Science and Technology Innovation Board 50, and ChinaAMC Guoxi Semiconductor Chip have increased their positions in them, and the proportion of shares held by 4 funds has reached 8.25% of the outstanding shares.

The research report suggests the risk of unsalable inventory

On the flip side of the rising stock price, Cambrian's financial data in recent years has been bleak, with continued losses, slowing revenue growth, and over-reliance on large customers becoming the main focus of the market.

The reporter of "Daily Economic News" noticed that in 2021~2023, Cambrian's revenue will basically remain at about 700 million yuan, the growth will be almost stagnant, and the losses will continue to be high, and the net profit attributable to the parent company will be -825 million yuan, -1.257 billion yuan, and -848 million yuan respectively. The 2023 annual report shows that although the margin of loss has narrowed, the overall performance is still under pressure.

In the first three quarters of 2024, Cambrian handed over a "report card" that could give a slight boost to confidence. In the first three quarters of 2024, Cambrian's revenue was 185 million yuan, a year-on-year increase of 27.09%; The net loss was 724 million yuan, narrowing the year-on-year loss. In the third quarter of 2024, Cambrian achieved revenue of 121 million yuan, a year-on-year increase of 284.59%, showing a certain growth momentum.

In a research report released in November 2024, Debang Securities said that it observed a significant increase in Cambrian prepayments, which reflects the company's aggressive production planning in the future and demonstrates good growth expectations. As of the end of the third quarter of 2024, Cambrian's prepayments reached $850 million, an increase of $300 million from the end of the second quarter. In addition, as of the end of the third quarter of 2024, the company's inventory reached 1.02 billion yuan, an increase of 780 million yuan from the end of the second quarter, presumably due to an increase in the purchase of raw materials.

Debang Securities also said that from the Cambrian financial data observation, the fourth quarter is usually the company's delivery period and performance release period, the company's inventory and prepayment substantial growth is a positive guide for the company's fourth quarter performance, with the inventory and prepayment gradually carried forward to the cost, the company's revenue can be expected.

At the same time, excessively high inventory levels may mean increased pressure on sales conversion, especially in the context of fierce competition in the AI chip industry and rapid changes in downstream demand, the risk of unsalable inventory cannot be ignored.

From the perspective of revenue structure, since the intelligent computing cluster system business has become the main source of revenue, Cambrian's "large customer dependence" has performed significantly.

In 2021 and 2022, Cambrian's largest customers are Jiangsu Kunshan High-tech Industry Investment and Development Co., Ltd. and Nanjing Science and Technology Innovation Investment Co., Ltd., whose sales account for 62.46% and 60.81% of total annual sales, respectively. According to the 2023 annual report, among Cambrian's top five customers, the first and second are new customers; The fourth and fifth are the top five new customers of the company's previous customers, of which the sales of the first largest customer accounted for 65.88% of the total annual sales.

The obvious performance of "large customer dependence" and the change of the largest customer year after year also make Cambrian's future revenue performance full of uncertainty.

Cover image source: Visual China