Nomura Research Report Analysis: CXMT Surges 471% on First-Day Opening, AI Storage Shortage Continues Until 2030, Target Price 116 Yuan

By: Rita

TechFlow Guide

On July 27, CXMT listed on the STAR Market, surging 471% at the open, with market cap briefly exceeding 3.3 trillion yuan.

Nomura Securities released its initial coverage report on the same day, giving a "Buy" rating with a target price of 116 yuan, corresponding to 20x P/E based on expected 2028 EPS of 5.8 yuan. Calculated at the issue price of 8.66 yuan, this implies over 12x potential upside.

Nomura's core logic is that AI demand growth (over 60%) will long-term outpace supply growth (30% to 40%), making structural DRAM shortages the norm. As the world's fourth-largest DRAM manufacturer, CXMT is at an inflection point for capacity expansion and domestic substitution.

Technology Catch-up: 5-Year Gap, Narrowing

CXMT's current mainstream process is 16 to 17 nanometers (1x to 1y nodes), with DDR5 yield around 80% and DDR4 over 90%, still leaving a gap of about 5 years compared to overseas leaders.

But the catch-up pace is accelerating. The company is advancing technology migration to 12 to 1a nodes (10 to 15 nanometers) without relying on EUV lithography machines, planning to achieve HBM3 mass production by 2027. HBM3 samples have been sent to top Chinese ICT companies, with HBM3e under development simultaneously. The Shanghai HBM packaging plant (Xinpu Tianmei) plans 50kwpm capacity, expected to start production by end of 2026.

In terms of pricing, CXMT products are 0 to 20% lower than overseas ones, but the advantage is limited, mainly benefiting from policy support rather than cost leadership. Nomura estimates its 2026 wafer ASP at about 14 to 15k USD, rising to 21 to 25k USD by 2027 to 2028 as nodes upgrade to 14 to 15 nanometers.

Domestic equipment rate is currently less than 40%. Core suppliers include AMEC (etching), Naura, Changchuan Technology (testing), ACM Research (cleaning). Nomura believes CXMT will cautiously evaluate the impact of domestic equipment on yield and profitability.

Market Share from 10% to 18%

China consumes about 25% of global DRAM, but domestic manufacturers' output share is only 10%, with self-sufficiency rate at just 30%. This is CXMT's largest growth driver.

Nomura expects CXMT's global share to rise from current about 10% to 18% by end of 2028, approaching Micron's scale. Clients include Alibaba Cloud, ByteDance, Tencent, Lenovo, Xiaomi, Transsion, Honor, OPPO, vivo, etc.

Financial data is confirming the trend. Cumulative losses from 2022 to 2024 exceeded 30 billion yuan, turning profitable in 2025 with net profit of 1.875 billion yuan. Q1 2026 revenue was 50.8 billion yuan (YoY +719%), net profit attributable to parent was 24.76 billion yuan (YoY +1688%), single-quarter profit already exceeding full-year 2025. The company expects H1 2026 revenue of 110 to 120 billion yuan, net profit of 50 to 57 billion yuan.

Capacity expansion is accelerating. Capacity at end of 2025 was 280kwpm, expected to reach 350kwpm by end of 2026, increasing by 100kwpm each in 2027 and 2028, reaching 550kwpm by end of 2028. Bit shipment CAGR is 40% to 45%, far higher than industry average.

AI Agents Are Eating Memory

Nomura's report technical insights are specific. A complete AI agent task goes through 8 stages: user request arrival, model weight loading, prefill, inference planning, tool execution, context integration, multi-step iteration, response generation.

The most memory-intensive stage is multi-step iteration, where KV-Cache expands exponentially. Even considering up to 5x compression effects from memory optimization technologies, AI-driven memory usage CAGR from 2026 to 2030 will still exceed 60%, with total volume growing over 7 times.

Nomura also proposed a more aggressive assumption. If AI robots run tasks autonomously, no longer limited by human operation pace, the demand ceiling will only be constrained by infrastructure and capital expenditure, theoretically having no ceiling.

Supply Side Can't Keep Up, Four Major Bottlenecks Simultaneously Constraining

Demand side CAGR is over 60%, supply side Nomura estimates only 30% to 40%.

The reasons the gap cannot be filled are specific. Semiconductor capacity expansion faces four major bottlenecks: cleanrooms, equipment, materials, and talent, each requiring several years to resolve.

Nomura believes that even if memory efficiency technologies can alleviate pressure to some extent, it only delays rather than reverses the trend. Ultimately, solutions like NAND offload (100x higher capacity but slower) and HBF (ultra-high bandwidth NAND) may need to be deployed simultaneously, but this could in turn exacerbate NAND supply tightness.

20x PE, Expensive or Not?

116 yuan target price equals 2028 EPS of 5.8 yuan multiplied by 20x PE.

Nomura's logic for this valuation is in two steps. Micron's average PE over the past five years is about 10x. There is a long-term valuation gap of 1 to 3 times between China and US listed semiconductor equipment stocks, taking ACM Research Shanghai versus its US parent company as an example. As China's DRAM leader, CXMT should enjoy a China premium, PE range 10 to 30x, taking the median 20x.

Calculated at issue price of 8.66 yuan, corresponding PE for 2026, 2027, 2028 are 4.2x, 2.1x, 1.5x respectively.

Notably, Northeast Securities gave a valuation range of 3.2 to 5.7 trillion yuan on the same day, Nomura's 7.76 trillion yuan is 1.4 times the former. The core divergence lies in CXMT's long-term share ceiling, Northeast Securities baseline assumption 17%, while Nomura bets on larger share space.

Disclaimer

This article is a compilation and interpretation by TechFlow Research of a third-party broker research report (Nomura Securities, July 27, 2026). Ratings, target prices, earnings forecasts, and related judgments cited in the text are the views of the broker's analysts, representing only their institution's stance, not representing TechFlow Research's views, nor constituting any investment advice.

Market involves risks, decisions must be independent. This article should not be used as a basis for buying or selling any securities.