Nomura Just Initiated Coverage on ChangXin, with Target Price of RMB 116, and Believes It Deserves 20x P/E — Twice Micron's Valuation, Mainly Considering ChangXin Storage's Market Share Growth and Chinese Market Valuation Premium

English summary

This implies a 13.4x increase from IPO price, with market cap around RMB 7.76 trillion... Earnings growth expectations: Driven by capacity expansion, process migration, and rising ASP, ChangXin Storage's 2026-2028 sales/net profit to parent CAGR are expected to reach 63% and 74%, respectively. Revenue forecast: from RMB 61.8 billion in 2025 to RMB 773.3 billion in 2028. Net profit forecast: from RMB 1.875 billion in 2025 to RMB 393.07 billion in 2028. Gross and net margins: gross margin expected to rise from 41.0% in 2025 to 90.5% in 2028; net margin from 3.0% to 50.8%. Cash flow: expected to be net cash by 2028, with FCF turning significantly positive. ChangXin Storage's market share improvement: expected bit capacity expansion CAGR of 40-45% in 2026-2030. ...