Key Takeaways:
JPMorgan initiated coverage on AI chip designer Tianshu Zhixin (09903.HK) with an “Overweight” rating and a HKD620 price target, citing the company’s unique position to navigate global semiconductor supply constraints.
The bank’s positive outlook is rooted in the view that for China's AI chip suppliers, access to foundry services has become a more critical bottleneck than pure chip performance. “Tianshu Zhixin can leverage foundry services from both domestic and international suppliers through its product portfolio,” JPMorgan said, which allows it to secure more design orders from leading Chinese cloud providers.
JPMorgan projects the company’s revenue will reach RMB2.95 billion in 2026 and grow to RMB5.57 billion in 2027. The bank forecasts a compound annual growth rate for sales of 102% from 2026 to 2028 and expects the company to achieve profitability in 2027 with an estimated adjusted net income of RMB2.88 million.
The initiation suggests Tianshu Zhixin is well-positioned to capture market share from competitors struggling with NVIDIA's GPU supply uncertainties. The bank's HKD620 price target is based on a 20x forward price-to-sales ratio for June 2025, reflecting high confidence in the company's growth trajectory and its potential as a key domestic alternative in China's AI infrastructure development.
The strong endorsement from a major investment bank may increase investor confidence and capital flow into Tianshu Zhixin. Investors will be watching for the company to announce new design wins with major cloud providers as the next major catalyst.
This article is for informational purposes only and does not constitute investment advice.
