Hygon Information Technology Co., Ltd.: Integrated CPU+GPU Compute Platform; Initiate at OW

研报英文原文证据摘录

Hygon Information Technology Co., Ltd.: Integrated CPU+GPU Compute Platform; Initiate at OW

FoundationM

Investment Summary

We initiate coverage of Hygon Information Technology at Overweight with a target price

of Rmb480, which implies 37% upside potential and 34x 2027e P/S. We see Hygon as a

core beneficiary of China’s accelerating push for compute self-sufficiency, positioned at

the intersection of domestic CPU substitution and AI-driven accelerator demand. The

company has established itself as a leading domestic x86 CPU vendor while

simultaneously expanding into AI accelerators (DCU), forming a differentiated “CPU +

GPU” dual-engine growth model.

Investment positives

Structural growth driven by AI demand and low self-sufficiency. We see Hygon as a key

beneficiary of China’s rapidly expanding AI compute demand alongside structurally low

domestic self-sufficiency in both CPUs and AI GPUs. Demand is being driven by large-scale

AI model training and inference deployment, as well as broader digital infrastructure

upgrades, which have already translated into revenue growth of 57% YoY in 2025; we

expect revenue growth momentum to continue at a 47% CAGR through 2028. At the

same time, external restrictions on advanced foreign chips are accelerating localization

across government and enterprise procurement, reinforcing a multi-year substitution

cycle. Given Hygon’s relatively low penetration in the domestic server CPU market

historically, and limited availability of competitive local alternatives, we believe there

remains substantial headroom for market share gains and revenue growth.

Positioned to capture cloud and agentic AI via x86 CPU leadership and security-driven

workloads. Hygon is well positioned to capture surging cloud and emerging agentic AI

demand.