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Shares of a Chinese AI chip company climbed after the firm announced a turn to profit with record earnings in the first half of the year, fueled by increased domestic demand following China’s emphasis on technological independence.
The company’s stock soared 6 percent to CNY 1,408.90 (approximately USD 197) during midday trading in Shanghai today. Since July 24, the stock has surged roughly 135 percent, likely reflecting growing optimism that locally produced chips will replace imported ones.
For the six months ending June 30, the company reported net profits exceeding CNY 1 billion (about USD 140 million), a significant turnaround from a CNY 530 million (USD 74.1 million) loss a year earlier, according to an earnings release issued yesterday. Revenue skyrocketed 44 times to CNY 2.9 billion.
The impressive first-half results were attributed to the company’s core expertise in AI chips and strengthened collaborations with leading AI models, internet companies, and other partners.
Research and development expenses increased slightly by 2 percent, representing 16 percent of revenue. The company’s research team now comprises 792 employees, making up 80 percent of its overall workforce.
In the second quarter, the company’s net profit reached CNY 683 million, a 3.2-fold increase compared to the same period last year and a 92 percent rise from the previous quarter. Revenue for the quarter surpassed CNY 1.8 billion, up 44 times year-over-year and 59 percent quarter-over-quarter.
Additionally, a major investment bank recently upgraded its “buy” rating on the company, raising its 12-month price target by 50 percent to CNY 1,835. The firm also increased its earnings forecasts, expecting net profits to grow 59 percent this year, 28 percent next year, and 29 percent by 2027, driven by anticipated growth in AI chip shipments.
Founded in 2016, the company specializes in software, IT services, and research and development related to AI chips.
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