CXMT Shares Fall Despite Forecast of 131 Billion Yuan Profit as Quarterly Growth Slows

A huge profit forecast meets a falling share price

ChangXin Memory Technologies expects net profit attributable to shareholders of 131 billion to 132.5 billion yuan for the first nine months of 2026, reversing a loss of 5.28 billion yuan a year earlier. Yet shares in the Chinese memory chipmaker fell about 6.5% on Monday, October 19, as its latest figures pointed to much slower growth between quarters.

CXMT disclosed the forecast on October 16 alongside a proposal from chairman Zhu Yiming to spend 1 billion to 2 billion yuan buying back shares. The company expects revenue of 265 billion to 270 billion yuan for January through September, compared with 32.084 billion yuan in the same period of 2025.

The financial turnaround reflects a surge in demand for memory as companies build computing systems for artificial intelligence. CXMT says shortages have pushed up prices, while its expanding factories and newer products have helped it sell more chips.

The more immediate issue for investors is the pace of growth. Expected third quarter profit of 53.395 billion to 54.895 billion yuan would be just 1% to 3% above the second quarter, despite the spectacular improvement from last year.

Monday's decline brought CXMT's market value below 3 trillion yuan during morning trading. The combination of rising earnings and falling shares captures the tension around the company: its business is expanding rapidly, but its stock market debut had already created exceptionally high expectations.

How large is the turnaround?

CXMT's revenue forecast represents an increase of about 726% to 742% from the first nine months of 2025. Put simply, the company expects to generate more than eight times as much revenue as it did a year earlier.

The expected swing in profit is equally large. Moving from a 5.28 billion yuan loss to a profit of 131 billion to 132.5 billion yuan amounts to an improvement of 136.28 billion to 137.78 billion yuan.

Comparing the profit and revenue forecasts gives an implied net profit margin of roughly 49% to 50%. That means about half of revenue would remain as profit attributable to shareholders after the costs and other items included in that measure. The figures are forecasts for the reporting period, rather than final results.

The surge follows an unusually strong first half. CXMT recorded revenue of 150.31 billion yuan for January through June, up 873.64% from a year earlier, and net profit of 77.61 billion yuan, compared with a loss of 2.33 billion yuan.

Those results exceeded its guidance before its initial public offering, which had projected first half revenue of 110 billion to 120 billion yuan and profit of 50 billion to 57 billion yuan.

Why quarterly growth matters to investors

CXMT earned 52.843 billion yuan in the second quarter. Its forecast of 53.395 billion to 54.895 billion yuan for the third quarter would add between 552 million and 2.052 billion yuan to that result.

The comparison explains why a company can announce a dramatic annual turnaround without receiving an enthusiastic market response. Annual comparisons measure progress against the weaker conditions of 2025. Comparisons between consecutive quarters show how quickly earnings are growing now.

Subtracting first half revenue from the nine month forecast gives implied third quarter revenue of 114.69 billion to 119.69 billion yuan. That would equal roughly 76% to 80% of all the revenue CXMT generated during the first six months of 2026.

CXMT is therefore still operating at a much larger scale than earlier in the year. The stock market question is how much further earnings can rise after such a sharp increase. Monday's price movement alone offers no precise breakdown of investors' reasons for selling.

What AI demand changes inside a memory factory

CXMT makes dynamic random access memory, usually called DRAM. These chips hold information that a computer needs to reach quickly while it is working. AI computing systems need memory alongside the processors that perform calculations.

The company attributes the improvement in its business to rapidly rising AI computing demand since the second half of 2025. It says global DRAM demand has exceeded supply, allowing substantial price increases.

Higher prices can have a powerful effect on a chipmaker's earnings because factories are expensive to build and operate. When a factory produces more saleable chips, those large costs can be spread across more products. If selling prices also rise, profit can grow much faster than revenue.

CXMT says its factories have maintained high capacity utilization, meaning a large share of their production capability is being used. It also credits factory construction, research and improvements in manufacturing processes with increasing output from each wafer, the thin disc on which chips are made.

The company identifies better operations, market expansion and closer cooperation with suppliers and customers as further reasons for its improvement. Its explanation combines stronger market prices with changes inside the business.

More factories and newer memory products

CXMT's manufacturing expansion began before the latest earnings surge. Omdia estimated that its monthly DRAM production capacity increased from 100,000 wafers in early 2024 to 290,000 by the end of 2025, an increase of 190%.

The company has also been increasing production of DDR5 memory, used in personal computers, workstations and servers. A shift toward newer products can change both the prices a manufacturer receives and the customers it can serve.

In September, CXMT disclosed that its fifth generation manufacturing technology platform had entered mass production and displayed high capacity LPDDR5X products built using that platform. LPDDR5X is a type of memory designed to combine fast data access with low power consumption, useful in devices where battery life and heat matter.

Expansion projects in Shanghai and Hefei have been described as potentially taking capacity above 600,000 wafers a month when fully operational. A second Beijing plant was also described as being in early financing discussions. Those projects represent future capacity, while the 290,000 figure describes estimated capacity at the end of 2025.

A larger challenger to Samsung, SK Hynix and Micron

CXMT accounted for 10% of global DRAM revenue in the third quarter of 2026, up from 5% a year earlier, according to Counterpoint Research. Its share therefore doubled, gaining five percentage points in a year.

The increase places the Chinese manufacturer more firmly alongside the industry's established suppliers, Samsung Electronics, SK Hynix and Micron Technology. Revenue share measures a company's portion of industry sales by value, so both the number of chips sold and their prices affect the result.

HP, Asus and Acer have incorporated CXMT DRAM into some laptop models, while Huawei remains a priority domestic customer. Adoption by those computer brands gives CXMT access to customers beyond China's domestic hardware industry, although use has been limited to selected products.

Apple was reported in July to have begun testing CXMT memory for products sold in China. Testing is a step in evaluating whether a component meets a manufacturer's requirements; no resulting supply agreement was identified.

For computer makers facing expensive or scarce memory, an additional supplier offers another purchasing option. CXMT must also compete for customers that already have substantial relationships with the three established manufacturers.

A spectacular listing set a demanding benchmark

CXMT began trading on Shanghai's STAR Market on July 27, 2026. Its initial public offering raised a reported $8.6 billion, compared with an earlier fundraising target of $4.2 billion for production expansion and development of newer DRAM technology.

The shares opened at 49.5 yuan against an issue price of 8.66 yuan, a rise of about 472%. The gain measured across the first trading day was reported at about 466%, reflecting a different point in the trading session.

By shortly after 10 a.m. on October 19, the shares were trading at 42.22 yuan, down 6.29% at that moment after an earlier fall approaching 9%. Market capitalization was about 2.86 trillion yuan, more than 13% below the cited peak of 3.31 trillion yuan.

The main events show how quickly the company's financial and stock market position changed:

• Early 2024: Monthly DRAM capacity was estimated at 100,000 wafers.
• End of 2025: Estimated monthly capacity reached 290,000 wafers.
• July 27, 2026: CXMT began trading on Shanghai's STAR Market.
• September 2026: The company disclosed mass production using its fifth generation technology platform.
• October 16, 2026: CXMT announced its nine month profit forecast and Zhu's share repurchase proposal.
• October 19, 2026: Shares fell despite the projected turnaround.

What the proposed buyback would do

Zhu proposed using company funds or funds it raises to repurchase between 1 billion and 2 billion yuan of CXMT's A shares. The shares could be used for employee incentives, employee ownership plans or a reduction in registered capital.

Those uses have different effects. Shares allocated to employees become part of compensation or ownership arrangements. Shares cancelled to reduce capital permanently lower the number of shares outstanding.

The proposed purchase price ceiling is 150% of the average trading price during the 30 trading days before the board approves the plan. That is a formula, so its precise yuan value depends on the relevant trading period.

The board still needs to approve the detailed plan. No implementation deadline or exact number of shares to be purchased was given. At Monday morning's market value of about 2.86 trillion yuan, even the proposed maximum spending of 2 billion yuan would equal only about 0.07% of the company's value.

Equipment access and political pressure remain constraints

CXMT's expansion faces restrictions on access to advanced manufacturing equipment. Applied Materials and Lam Research were reported to have suspended servicing in March 2026, while the company lacks access to extreme ultraviolet lithography equipment used in advanced chip production.

Equipment servicing matters because chip factories depend on precision machinery operating reliably. Introducing a new manufacturing process also requires a company to keep enough chips working correctly to make production economical.

Mizuho projected that CXMT's memory bit supply would grow 13% in 2027, compared with 21% for the industry. Bit supply measures the amount of memory produced, rather than the number of individual chips. Its projection puts CXMT's expansion below the industry's pace despite the company's factory plans.

US senators Jim Banks and Chuck Schumer have also warned against using CXMT chips, citing the company's inclusion on a Pentagon list of Chinese businesses alleged to support China's military. Their objections add political pressure for American companies considering purchases.

CXMT's immediate business position is nevertheless much stronger than a year ago: revenue has multiplied, earnings have turned positive and its share of global DRAM revenue has increased. For shareholders, the next test is the pace of profit growth from that much higher base and the board's decision on the proposed repurchase.

Key Points

• CXMT forecasts profit of 131 billion to 132.5 billion yuan for January through September 2026, reversing a loss of 5.28 billion yuan.
• Expected revenue of 265 billion to 270 billion yuan is more than eight times the level a year earlier.
• Third quarter profit is expected to rise only 1% to 3% from the second quarter.
• Shares fell about 6.5% on October 19, with market value dropping below 3 trillion yuan during morning trading.
• Counterpoint Research puts CXMT's global DRAM revenue share at 10%, twice its share a year earlier.
• Chairman Zhu Yiming proposed a buyback of 1 billion to 2 billion yuan, subject to board approval of the detailed plan.