2Q26 Revenue Miss, Profit in Line; Supply visibility Remains Key

Research evidence excerpt

Not for redistribution without written consent of Morgan Stanley

M

Update

August 7, 2026 03:17 PM GMT

Cambricon Technology Corporation | Asia Pacific

Morgan Stanley Taiwan Limited+

Charlie Chan

Equity Analyst

2Q26 Revenue Miss, Profit in

Line; Supply visibility Remains

Key

Morgan Stanley Asia Limited+

Henry Zhao

Research Associate

Morgan Stanley Taiwan Limited+

Daniel Yen, CFA

Equity Analyst

AlphaSignals Earnings Reaction

Morgan Stanley Asia Limited+

Unchanged

Modest shortfall

Largely unchanged

Impact to our thesis

Financial results versus consensus

Direction of next 12-month

consensus EPS

Daisy Dai, CFA

Equity Analyst

Source: Company data, Morgan Stanley Research

2Q26 results:

• Revenue: Rmb3.1bn, below our already-reduced estimate (see our 2Q26

preview), reflecting slower delivery timing and revenue recognition.

• Gross margin: 56.1%, up 1.8ppt Q/Q, suggesting Cambricon maintains robust

pricing power.

• Net income: Rmb1.3bn, up 19% Q/Q and 90% Y/Y, in line with our estimate,

supported by strong operating leverage.

Prepayments and inventory remain the key indicators to watch. Cambricon’s

prepayments and inventory reached Rmb2.9bn and Rmb8.2bn in 2Q26, up 53% and

83% Q/Q, respectively. We view the inventory build as particularly important. Our

supply-chain checks suggest Chinese AI semi vendors face increasing difficulty

securing HBM supply, and the ability to lock in sufficient HBM inventory during

2026 could be a key determinant of shipment stability in 2027.

Keep OW. We remain constructive on China’s domestic AI semiconductor sector.

Cambricon continues to offer relatively high visibility on both demand and supplychain execution, supported by strong customer orders and improving inventory

preparation. Despite near-term volatility in delivery and revenue recognition, we

remain positive on the company’s shipment growth and earnings trajectory.

Cambricon Technology Corporation (688256.SS, 688256

CG)

Greater China Technology Semiconductors | China

Stock Rating

Industry View

Price target

Up/downside to price target (%)

Shr price, close (Aug 7, 2026)

52-Week Range

Sh out, dil, curr (mn)

Mkt cap, curr (mn)

EV, curr (mn)

Avg daily trading value (mn)

…