Vanchip (688153)

Equity Research 20 September 2026 | 5:23PM HKT

Vanchip (688153.SS): New multi-band solutions launched; Slow smartphone market weighing on growth; 2Q26 miss; Sell

Vanchip’s 5G product portfolio includes modules with medium to high levels of Allen Chang | integration, such as 5G MMMB PAs, L-PAMiFs, and L-PAMiDs, forming a Goldman Sachs (Asia) L.L.C. comprehensive solution matrix that addresses the needs of smartphones across Verena Jeng various price segments. Vanchip launched its U6G products in Jun 2026, which | Goldman Sachs (Asia) L.L.C. adopts the single-chip module to meet operators’ needs for mixed networking across high and low frequency bands, significantly reducing the cost of product iterations Yifan Hu | Goldman Sachs (Asia) L.L.C. for multi-band solutions. Vanchip is also expanding its WiFi and satellite networking RF front-end modules, which could support the company’s growth in the long run, in our view. We are positive on Vanchip’s migration to higher-end 5G PA modules (e.g. LPAMiD, LPAMiF) and product line expansions towards 6G, satellite networking, etc; however, the slow smartphone market could cap its growth; with stretched valuation, we maintain Sell.

Earnings revision: We factor in Vanchip’s 2Q26 result and revise down our 2026-27E net incomes by 27% / 18%, mainly on lower revenues and GMs. Our 2026-27E revenues are revised down to reflect the 2Q26 revenue miss and the sluggish smartphone end demand on high memory costs. We revise down our 2026-27E GMs to reflect the pricing competition in the market. We introduce our 2028E estimate. Vanchip’s 2Q26 revenue and GM is lower than our estimate, reflecting the modest growth of smartphone end markets and pricing competition. 2Q26 opex ratio is higher than our estimate, leading to a net loss in 2Q26 (vs. our estimate of net income at Rmb27m).

Exhibit 1: Earnings revision 2026E 2027E 2028E RMB mn Old New Chg% Old New Chg% Old New Chg% Revenue 3,239 2,647 -18% 4,142 3,471 -16% 3,907 GP 875 632 -28% 1,150 935 -19% 1,069 OP income 233 124 -47% 473 365 -23% 438 Net income 212 155 -27% 390 320 -18% 388 Margins GM 27.0% 23.9% -3.1ppts 27.8% 26.9% -0.8ppts 27.4% OPM 7.2% 4.7% -2.5ppts 11.4% 10.5% -0.9ppts 11.2% NM 6.5% 5.9% -0.7ppts 9.4% 9.2% -0.2ppts 9.9%

Source: Company data, Goldman Sachs Global Investment Research

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Goldman Sachs Vanchip (688153.SS)

Exhibit 2: 2Q26 result snapshot 2Q26 2Q26 (Rmb mn) Actual GS Diff 1Q26 QoQ 2Q25 YoY Revenue 491 687 -28% 483 2% 478 3% Gross profit 106 182 -42% 103 4% 134 -21% Opering income -44 23 na -53 na -13 na Pre-tax profit -46 36 na -48 na 6 na Net income -47 27 na -48 na 9 na EPS -0.11 0.06 na -0.11 na 0.02 na Margins Gross margin 22% 26% 21% 28% Operating margin -9% 3% -11% -3% Pre-tax margin -9% 5% -10% 1% Net margin -9.6% 4% -10% 2%

Source: Company data, Goldman Sachs Global Investment Research

Valuation: We roll our base year forward from 2026E to 2027E and continue to derive our 12M TP from near-term P/E. Our 2027E target P/E is updated to 41x (vs. old TP implied at 37x), mainly on higher forward year earnings growth and still based on peers’ forward year earnings growth and trading P/E multiple. With our updated target P/E and earnings estimates, our 12M TP is revised down to Rmb30.5 (vs. Rmb34.0 previously). Maintain Sell.

Exhibit 3: The target P/E multiple is derived from correlation between peers’ P/E and earnings YoY

Source: Company data, Goldman Sachs Global Investment Research, Refinitiv Eikon