On the evening of August 28, ChangXin Memory Technologies (CXMT) released its first half-year report since going public. First-half revenue came in at RMB 150.31 billion, up 873.64% year on year; net profit attributable to shareholders of the listed company reached RMB 77.605 billion, versus a loss of RMB 2.332 billion in the same period last year. Net cash flow from operating activities hit RMB 131.156 billion, up 2985.64% year on year, with basic earnings per share of RMB 1.2893.
By quarter, net profit attributable to shareholders was RMB 24.762 billion in Q1 and RMB 52.843 billion in Q2, up 113% quarter on quarter. Stripping out non-recurring items, net profit was RMB 78.793 billion — higher than the headline figure — indicating the profit came almost entirely from core operations rather than one-off gains.
What Does an 84.84% Gross Margin Actually Mean?
The half-year report puts core-business gross margin at 84.84%, with a weighted average return on equity of 81.06%. The company's explanation is blunt: global DRAM products are in short supply, prices have risen sharply, and that has driven a sharp increase in gross profit on the company's main DRAM products.
The number is clearer against peers. Public reports put CXMT's Q1 gross margin at 72.1%, already above SK Hynix's 68.3% and closing in on Samsung Semiconductor's 74.5%; by the first-half full-period figure it had climbed further to 84.84%. Memory is a commodity business with limited product differentiation, so gross margin is close to a direct reading of the supply-demand gap — the deeper the shortage, the more absurd the price the same wafer fetches.
A rough tally: RMB 150.31 billion in first-half revenue against RMB 77.605 billion in net profit works out to a net margin of about 51.6%; spread over 181 days, that's roughly RMB 430 million in net profit per day. A half-year profit of this size already exceeds the full-year revenue of most semiconductor companies listed on China's A-share market.
On the Demand Side, AI Is Crowding Out Capacity
The starting point of the DRAM price surge isn't standard memory itself. AI data centers are competing for HBM, and HBM is eating up capacity and advanced-packaging resources that would otherwise go to standard DDR production, passively squeezing standard-product supply and pushing prices up. Makers of general-purpose DRAM haven't done anything special in this cycle — they've simply ended up on the shortage side of the market.
CXMT itself is shifting toward HBM. Public reports say the company has allocated about 20% of its DRAM capacity to HBM, prioritizing supply to domestic AI products; 12-layer HBM3 samples have already been delivered, with mass production scheduled for the end of this year, while mass production of 12-layer HBM3E is targeted for 2027. The technology gap with Korean manufacturers has narrowed to two to three years — the most substantive progress domestic memory has made in years.
R&D, Patents and Market Cap
R&D spending totaled RMB 6.859 billion, up 87.38% year on year; the company has 7,491 R&D staff, or 33.42% of total headcount. On patents, it holds 4,484 domestic filings (including 3,744 invention patents) and 3,400 overseas filings. On the product side, the disclosed LPDDR6 chip has a peak speed of 12,800Mbps and a maximum capacity of 16GB.
The balance sheet is expanding too: total assets stand at RMB 468.078 billion, up 38.98% from the end of last year; net assets attributable to shareholders reached RMB 134.722 billion, up 137.38%. The secondary market is pricing the stock even more aggressively — the share price sits at RMB 58.6, giving a market cap of RMB 3.98 trillion, a cumulative gain of 576.67% from its July 27 listing through August 28. Simply annualizing first-half profit puts the static P/E ratio at roughly 26x (a rough estimate).
For a cyclical stock like this, the denominator of the P/E ratio matters more than the numerator. How long DRAM contract prices keep climbing, and when HBM capacity actually ramps, will decide whether this half-year report marks a starting line or a peak. The memory industry has replayed the same script for three decades: once gross margins push past 80%, expansion plans pile in across the board, and prices collapse two years later. What's different for CXMT this time is that the downstream driver is AI compute — and there's no sign yet of the brakes coming on AI capex.
Sources: CXMT half-year report, National Business Daily, CocoLoop, ESM China, Ifeng Finance; revenue, profit and margin figures follow the half-year report disclosures, while HBM capacity and production timelines are based on public reporting.