Cambricon (688256)

Equity Research 24 August 2026 | 9:03AM HKT

Cambricon (688256.SS) China AI demand and localization trend to drive growth ahead; TP up to Rmb1,841; Buy

688256.SS 12m Price Target: Rmb1,841.00 Price: Rmb1,035.00 Upside: 77.9% BUY Verena Jeng We are positive on Cambricon and see strong China AI chips demand | Goldman Sachs (Asia) L.L.C. (read more: CHIPS IV: China Semis self-sufficiency builds) supporting Allen Chang the company’s growth ahead. Cambricon’s AI chips are expanding to | Goldman Sachs (Asia) L.L.C. various industries, along with continuous specification upgrades driving the blended ASP. We raise Cambricon’s EBITDA by 1% / 41% Yifan Hu | Goldman Sachs (Asia) L.L.C. / 69% / 71% / 82% in 2026-30E mainly on higher revenues, reflecting the strong China AI chips demand along with the nation’s commitments toward self-sufficiency. Our TP is raised from Key Data _____________________________________ Market cap: Rmb601.9bn / $89.6bn Rmb1,614.77 to Rmb1,841 (implied 82x 2027E PE vs. +111% avg. Enterprise value: Rmb599.1bn / $89.1bn 3m ADTV: Rmb17.7bn / $2.6bn EPS YoY in 2027-28E). Maintain Buy. China Greater China Technology AI chips in various verticals: Cambricon enables enterprise clients M&A Rank: 3 Leases incl. in net debt & EV?: No across multiple sectors to deploy AI applications. Its customer base GS Forecast __________________________________ spans foundation model providers, server suppliers, AI software 12/25 12/26E 12/27E 12/28E

suppliers, cloud, energy, education, financial institutions, telecom Revenue (Rmb mn) New Revenue (Rmb mn) Old 6,497.2 6,497.2 23,980.4 23,661.8 91,261.6 39,106.5 172,469.6 62,158.3 operators, hospitals, and internet companies. For financial EBITDA (Rmb mn) 2,185.3 6,744.1 16,004.0 31,225.8 EPS (Rmb) New institutions, Cambricon’s AI chips are used in business operation EPS (Rmb) Old optimization and service efficiency improvement; for internet P/E (X) P/B (X) companies, its chips are tailored for foundation models, multimodal Dividend yield (%) 0.2 0.3 0.7 1.3

AI applications, search and recommendation. Its AI chips adapt to CROCI (%)

mainstream AI applications and realize scale training in 1H26. In 6/26 9/26E 12/26E 3/27E

areas including smart grids, smart mines, smart cities, and smart EPS (Rmb)

supermarkets, customers use Cambricon’s AI chips to deploy GS Factor Profile ______________________________ Growth intelligent analytics applications: (1) smart cities: intelligent semantic search and video structured analysis, (2) smart mines: Financial Returns

cargo visual intelligent inspection, intelligent operation and Multiple

maintenance of power equipment, safety production monitoring, (3) Integrated smart transportation: traffic incident detection. In 1H26, Cambricon further expanded to the supermarket / retail industry, empowering Percentile 20th 40th 60th 80th 100th

clients to adopt AI, such as customer traffic counting and 688256.SS relative to Asia ex. Japan Coverage recognition, smart inspection, store anti-theft and loss prevention. 688256.SS relative to Greater China Technology

AI chips migration with rising R&D engineers: On AI chips, Source: Company data, Goldman Sachs Research estimates. See disclosures for details. Cambricon’s next-generation intelligent processor

Goldman Sachs does and seeks to do business with companies covered in its research reports. As a result, investors should be aware that the firm may have a conflict of interest that could affect the objectivity of this report. Investors should consider this report as only a single factor in making their investment decision. For Reg AC certification and other important disclosures, see the Disclosure Appendix, or go to Analysts employed by non-US affiliates are not registered/qualified as research analysts with FINRA in the U.S.

Goldman Sachs Cambricon (688256.SS)

Cambricon (688256.SS) Income Statement (Rmb mn) ________________________________ BUY Rating since Apr 22, 2025 12/25 12/26E 12/27E 12/28E Total revenue 6,497.2 23,980.4 91,261.6 172,469.6 Cost of goods sold (2,913.9) (11,674.5) (44,716.5) (85,370.3) SG&A ( ) Ratios & Valuation __________________________________________ R&D (1,350.8) (5,468.5) (30,116.3) (55,190.3)…