According to the Wind Chasing Trading Desk, Goldman Sachs released its latest research report.We maintain our "buy" rating on Changxin Technology and slightly raise our 12-month target price from RMB 129 to RMB 130.The direct catalyst for this upward revision was Changxin Technology's third-quarter earnings forecast.Goldman Sachs expects the company's Q3 revenue to be between RMB 115 billion and RMB 120 billion, representing a quarter-on-quarter increase of 15% to 20%, with the median value about 30% higher than Goldman Sachs' previous forecast.
This better-than-expected guidance, coupled with the company's announcement that its fifth-generation DRAM technology platform (G5) will officially enter mass production in September 2026, further strengthened Goldman Sachs analysts' assessment of Changxin Technology's medium- and long-term growth logic. Accordingly, Goldman Sachs raised its profit forecast for the company from 2026 to 2030 and identified it as a core beneficiary in the upward cycle of domestic DRAM demand.
The company's current stock price is approximately 40 yuan, which, according to Goldman Sachs' target price, implies an upside potential of up to 225%. It is worth noting that Changxin Technology's stock price has recently fallen sharply, and its current market capitalization has fallen below 3 trillion yuan.
Q3 guidance significantly exceeded expectations, and net profit strengthened accordingly.
In terms of net profit, the company's Q3 net profit guidance range is 53 billion to 55 billion yuan, a slight increase compared to the previous quarter, and the median is about 17% higher than Goldman Sachs' previous forecast.
In its report, Goldman Sachs also raised its earnings forecasts for 2026 to 2030, with its revenue forecast for fiscal year 2026 increasing from RMB 354.9 billion to RMB 387.5 billion, an increase of approximately 9%. The net profit forecast has been raised from 183.8 billion yuan to 191.8 billion yuan, an increase of approximately 4%. In terms of gross profit margin, Goldman Sachs expects the company's gross profit margin to be approximately 81.4% and net profit margin to be approximately 49.5% in 2026.
Looking ahead to the following quarters, Goldman Sachs expects Changxin Technology's Q4 revenue to continue its quarter-on-quarter growth trend.
The G5 platform is in mass production, and the technology roadmap continues to advance.
Goldman Sachs gave a positive evaluation of this.It is believed that the mass production of the G5 demonstrates the company's ability to continuously advance into the deep waters of core technologies, helps support its competitive position in the domestic DRAM market, and lays the foundation for iterating towards the next generation of platforms.
Valuation Methods and Target Price Logic
The target P/E of 16.6 times is determined based on the correlation between peer P/E and profit growth, corresponding to an average year-on-year net profit growth rate of approximately 21% for Changxin Technology from fiscal years 2030 to 2031. The current target price implies a 2027 P/E of approximately 24 times.
In terms of COE calculation, Goldman Sachs uses a Beta value of 1.5, a risk-free interest rate of 3.0%, and a market risk premium of 6.5%, for a total COE of 12.7%.
Medium- and long-term growth logic: driven by AI, supply chain restructuring, and capacity expansion.
Firstly, the continued expansion of domestic AI demand in China has driven a dual-track increase in demand for server DRAM and HBM, directly benefiting Changxin Technology as a major domestic supplier.
Secondly, downstream customers are proactively promoting supplier diversification for supply chain security reasons, which has created continuous order acquisition opportunities for Changxin Technology.
Third, the company's own capacity expansion plan provides physical support for revenue growth. Goldman Sachs predicts,The company's revenue is expected to grow from RMB 387.5 billion in 2026 to approximately RMB 1.39 trillion in 2030, while net profit will increase from RMB 191.8 billion to approximately RMB 747.9 billion during the same period.
