[Click eStock] Is It Worth Investing in Chinese Semiconductor Companies?

Mirae Asset Securities has raised its target price for ChangXin Memory Technologies (CXMT) from 80 yuan to 90 yuan.

On September 2, Kang Minhee, a researcher at Mirae Asset Securities, stated, "We have raised our average selling price (ASP) estimate for this year, expecting that DRAM prices will continue to rise in the second half due to a global memory shortage. Currently, CXMT is trading at a 56% discount compared to the average 2025 price-to-earnings ratio (PER) of the top five semiconductor companies in China."

CXMT's earnings leverage is expected to accelerate. According to researcher Kang, "Second-quarter revenue jumped 95.9% quarter-on-quarter to 99.51 billion yuan, and operating profit surged 130.6% quarter-on-quarter to 81.71 billion yuan, both significantly exceeding estimates." He added, "In the third quarter, performance is forecast to remain strong, with revenue of 120.16 billion yuan and operating profit of 96.13 billion yuan, supported by higher price bases that will continue to drive income growth."

For the year, annual revenue is estimated at 407.4 billion yuan, with operating profit expected to reach 320 billion yuan. Kang noted, "Price hikes are expected to drive top-line growth through this year, and long-term supply contracts for key customers will persist due to the supply shortage of generic DRAM in China. Starting next year, as Chinese big tech companies increase their investment in artificial intelligence (AI) infrastructure, demand for server DRAM will grow further, and improvements in production capacity will contribute to increased volumes. In addition, expansion of HBM supply for domestic AI accelerators will also drive sales growth."

This content was produced with the assistance of AI translation services.