Cambricon's first-year profit leads to a generous dividend of 600 million, but netizens on the stock forum are arguing about it.

(Source: Damo Finance)

Produced by｜Damo Finance

“China’s Nvidia” Cambricon (688256.SH) delivered a set of results with strong growth. In 2025, the company achieved operating revenue of 6.497 billion yuan, up 453.21% year over year. Net profit attributable to shareholders was 2.059 billion yuan, successfully swinging from loss to profit, up 555.24% year over year. Since its IPO in 2020, Cambricon has posted annual profitability for the first time.

On the day it released its annual report, Cambricon also unveiled its first dividend proposal since listing. Cambricon said it will distribute cash dividends of 15 yuan for every 10 shares to all shareholders, for a total cash dividend payout of 632 million yuan, accounting for 30.71% of the company’s net profit attributable to shareholders for the period. Meanwhile, the company plans to capitalize its capital surplus to convert 4.9 shares for every 10 shares to all shareholders. After the capitalization is completed, the company’s total share capital will reach 628 million shares.

This is the first dividend Cambricon has paid since its listing. However, in the face of this move, investors’ attitudes have split. On investor platforms such as stock discussion forums, some investors said this is an important measure for Cambricon to reward shareholders and is also consistent with the regulatory direction encouraging listed companies to pay cash dividends. Others questioned whether the dividend is meant to set the stage for a reduction in holdings by Cambricon’s controlling shareholder.

In May 2024, the China Securities Regulatory Commission approved the Provisional Measures for the Administration of the Reduction of Shares by Shareholders of Listed Companies (hereinafter referred to as the “new rules for share reductions”). The new rules make it clear that in circumstances such as share prices falling below the issue price (“broken issuance price”), book values per share falling below the issue price (“broken book value”), or failure to meet dividend targets, the company’s controlling shareholders and actual controllers may not reduce shares through centralized bidding or block trades.

Among them, “failure to meet dividend targets” refers to not implementing cash dividends in the past three years, or cumulative cash dividends that are less than 30% of the average annual net profit attributable to shareholders over the same period (accounting years with negative profits are not included in the calculation). For Cambricon, which only just returned to profitability in 2025, after this cash dividend is completed, its controlling shareholder will meet the conditions for share reduction.

Since last year, Cambricon has been laying the groundwork for dividends. In November 2025, Cambricon issued an announcement stating it would use 2.778 billion yuan of its parent company’s capital surplus to make up for accumulated losses. The company said this is mainly to ease the burden of historical losses, thereby helping enhance the company’s ability to deliver returns to investors.

At that time, some investors questioned whether this was paving the way for major shareholders to cut their holdings. In response, a Cambricon staff member, in an interview with the media, said that meeting dividend conditions and whether dividends will be implemented subsequently are two different things, and there is no inherent link. “As for saying it is creating conditions for major shareholders to cut their holdings—that is even more unfounded. One of the conditions for share reduction is that dividends have been paid in the past three years. The company now has not even met the conditions for paying dividends—how can it be talking about share reduction?”

As one of the hottest stocks in this round of the A-share bull market, Cambricon’s share price rose nearly 400% in 2024, and then doubled again in 2025. During this period, the company’s share price at one point surpassed Guizhou Moutai, becoming the “No. 1 stock king” on the A-share market. But since 2026, the share price has pulled back somewhat; by the close on March 17, the share price had fallen to 10,799.99 yuan per share, with a total market value of 455.4 billion yuan, more than 30% down from the 2025 peak.

By the end of 2025, Cambricon’s actual controller, Chen Tianshi, directly and indirectly held 29.34% of the company’s shares, and his latest shareholding value exceeded 130 billion yuan. If Cambricon’s dividend is implemented this time, Chen Tianshi could receive approximately 180 million yuan in dividend payments.

It is worth noting that well-known retail-activist investor Zhang Jianping is steadily increasing his stake in Cambricon. By the end of 2025, Zhang Jianping held 6.8149 million shares of Cambricon, making him the company’s fifth-largest shareholder, with a shareholding ratio of 1.62%, up 0.09 percentage points from the end of the third quarter. Based on the latest share price, Zhang Jianping’s stake is valued at about 7.4 billion yuan.

Rising compute demand boosts performance

With the artificial intelligence industry’s compute demand continuing to climb, it is the main driver behind Cambricon’s big surge in 2025 performance.

Cambricon is a leading domestic provider of compute chips. It mainly offers cloud-based intelligent chips and boards, intelligent servers and other products. These products are key components used for AI processing in cloud servers, data centers, and similar environments.

With the rapid development of the AI industry, compute has become a scarce resource. According to IDC data from an international market research agency, in the first half of 2025, the market size of China’s accelerated (i.e., AI chip) server market reached 16 billion USD, more than doubling year over year. Benefiting from the surge in demand, Cambricon’s revenue scale grew by more than 4.5 times in 2025.

Cambricon also used this opportunity to expand its customer base. In 2025, sales to the top five customers were 5.76 billion yuan, representing 88.66% of revenue, slightly down from 94.63% in the same period last year. Among the top five customers, aside from the third-largest customer being a long-term partner, the rest were new customers.

With growth in revenue scale, Cambricon’s profits were released quickly. In 2025, the company’s gross margin was 55.15%, down 1.56 percentage points from the same period last year, while the net profit margin attributable to shareholders improved from -38.51% to 31.69%. Under the backdrop of high revenue growth, a sharp drop in expense ratios is the main reason for the company’s improved profitability. In 2025, Cambricon’s R&D expense ratio was 20.79%, compared with 103.57% in the same period of the previous year.

It is worth noting that behind the growth in performance, Cambricon’s inventory scale is also rising. By the end of 2025, the book value of the company’s inventory was 4.944 billion yuan, up 178.67% from the same period last year, and the proportion of inventory to total assets increased to 36.79%.

Cambricon said that the increase in raw materials inventory is the main reason its inventory scale has climbed. From the financial report, the growth in the book value of inventory goods is also one of the reasons behind the inventory increase. At last year’s first-half performance meeting, Cambricon said that considering the strong demand for AI compute in commercialization scenarios such as large models, the commercialized use case is expected to bring continuous revenue to the company, so the company stocked up for its cloud-based product lines.

According to a research report by Haitong Securities, looking ahead to 2026, the deployment of Agent will drive the rise in compute demand, token call volumes will ramp up quickly, and combined with restrictions on exports of high-end overseas compute chips, the substitution of domestic AI chips may continue to accelerate. Against this backdrop, Cambricon, leveraging its leading advantages in supply assurance capabilities, product iteration speed, and product definition precision, may continue to benefit from the dividends of demand growth.

To improve competitiveness, Cambricon carried out a follow-on share issuance in October 2025. It raised 3.985 billion yuan at a price of 1,195.02 yuan per share, for projects such as a chip platform project for large models and a software platform project for large models. Cambricon said this follow-on issuance will enhance the company’s overall strength in chip technology and products for large models and build a software platform for large models, further improving the openness and ease of use of its software ecosystem.

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