Montage Tech net profit jumps up to 98% as buyback plan aims to steady stock

Montage Technology Co. said second-quarter net profit rose as much as 98% from a year earlier, beating analyst estimates, as the Chinese AI chip maker announced a share buyback to counter selling pressure from a South Korean antitrust probe.

"The strong results reflect robust demand for our memory interface chips from global AI data center customers," Montage said in a Hong Kong stock exchange filing Friday, without naming an executive.

Second-quarter net profit reached RMB 1.053 billion to RMB 1.253 billion ($146 million to $174 million), representing year-on-year growth of 66% to 98%. The midpoint of the range exceeded consensus estimates by 37% and Citi's forecast by 42%, driven by higher revenue scale, gross margin expansion and investment gains. For the first half, net profit totaled RMB 1.9 billion to RMB 2.1 billion, up as much as 81% from a year earlier.

The upbeat guidance comes as South Korean prosecutors raided Montage's local office over suspected price-fixing of semiconductor components, local media reported Thursday. South Korea accounted for more than half of Montage's revenue in 2025. The company confirmed the raid in a filing, saying it has cooperated with authorities and that no employees have been charged. Hong Kong-listed shares fell 8.5% to HKD 255 on Friday, extending a 23% plunge the prior session, with short selling reaching HKD 140.5 million or 9.6% of turnover.

Citi maintained a Buy rating on Montage with a target price of HKD 305, implying roughly 20% upside from Friday's close. The broker said the strong earnings alert and the buyback plan should help stabilize the stock despite the ongoing investigation. Montage's chairman proposed repurchasing between RMB 300 million and RMB 600 million of the company's onshore A-shares using corporate funds.

The earnings beat signals that Montage's core memory interface chip business continues to benefit from AI infrastructure buildout, even as the legal overhang in South Korea creates near-term uncertainty. Investors will watch for further developments in the price-fixing probe and the company's interim report for full segment details.

This article is for informational purposes only and does not constitute investment advice.