The market typically ranks semiconductor companies by market capitalization and revenue scale. However, an analysis of the Q3 2026 reports reveals that the true value of leading companies lies not in who has higher revenue, but in whose profits withstand scrutiny and whose valuations can be justified. This article uses the top ten A-share semiconductor companies by total market capitalization as a sample, breaking down each company's latest P/E ratios and sell-side target valuations to determine how much of their headline growth is sustainable profit versus book prosperity driven by cyclical price hikes, non-recurring gains/losses, or long-term narratives.
Next, we dissect the Q3 single-quarter financial data, P/E ratios, and valuation logic for these ten companies—to see who is realizing profits through cycles, who is supporting valuations with future narratives, whose low P/E is a trap, and whose high P/E has real anchors.
Data Note: All figures below are from the third quarter (July–September) 2026 single-quarter reports; amounts are in CNY billions. SMIC (688981.SH) has not yet disclosed its Q3 report. Its Q3 operational data is primarily guided in USD: Q2 revenue was $3.006 billion, with Q3 revenue guidance indicating a +2%–4% quarter-over-quarter increase (equating to approximately $3.07–3.13 billion). Based on Q2 RMB revenue of approx. CNY 21.018 billion and the Q3 sequential guidance, SMIC's Q3 RMB revenue is likely in the range of CNY 21.0–22.0 billion.
Q3 Data Summary
I. Core Single-Quarter Income Statement
II. Sequential Quarter Comparison (vs. 2026 Q2)
III. Single-Quarter Cash Flow (Key to Earnings Quality)
IV. Four Key Metric Points to Note in Q3
- Advanced Micro-Fabrication Equipment (AMEC): Q3 net profit attributable to parent was CNY 1.309 billion, while adjusted net profit was only CNY 0.500 billion, indicating approx. CNY 0.8 billion in non-recurring gains/losses; moreover, Q3 revenue declined -3.7% sequentially and net profit fell -30.9% sequentially, making it the clearest case of "apparent growth, weakening core business" among the Q3 reports. MetaX (688802.SH): Q2 net profit attributable to parent was CNY 0.711 billion (including significant non-recurring gains), dropping sharply to CNY 0.027 billion in Q3. However, Q3 adjusted net profit of CNY 0.308 billion exceeded the net profit attributable to parent, suggesting Q2's high profit was not comparable, and the -96% sequential drop should not be simply interpreted as deteriorating operations. Moore Threads (688795.SH): Revenue grew +1773.9% year-over-year (due to an extremely small base in last year's Q3) and +55.4% sequentially, but single-quarter adjusted net profit was only CNY 0.020 billion, still hovering near the break-even line. Naura Technology (002371.SZ): Q3 revenue grew only +1.3% year-over-year and net profit +5.2%, the lowest growth rates among the ten companies. The slowdown in equipment sector growth is more evident in single-quarter data than in cumulative figures.
What Is the Real Value?
CXMT (Changxin Memory Technologies) 688825.SH | Rank 1 by Market Cap
Q3 Revenue CNY 118.714 billion | Net Profit Attributable to Parent CNY 54.435 billion | Gross Margin 89.53% | Operating Cash Flow CNY 123.596 billion | P/E 20.4x / P/B 14.1x / 1-Year P/E Percentile 6.3%
A gross margin of 89.5% and net margin of 75% are historically rare levels for A-share semiconductors. Single-quarter operating cash flow was 2.27 times net profit, meaning profits were almost entirely converted into cash. According to TrendForce metrics, DRAM contract price increases have converged from nearly 80% in Q2 to an estimated ~20% in Q4. However, supply-side constraints remain hard: HBM crowds out general-purpose DRAM capacity, new overseas capacity will not release until after2027, and Goldman Sachs has revised the 2027 DRAM supply-demand gap downward from -2.5% to -5.9%.
Valuation Judgment: A 20x P/E is not a market error but a typical cyclical stock discount at the peak, where the market has already priced in a price decline in 2027. The impact of a 14x P/B is greater than the P/E—if the cycle reverses, the contraction in P/B could lead to larger declines. Morgan Stanley warns that "memory stocks often peak before earnings do."
Cambricon 688256.SH | Rank 2 by Market Cap
Q3 Revenue CNY 3.531 billion (+104.5% YoY / +13.5% QoQ) | Net Profit Attributable to Parent CNY 1.404 billion | Gross Margin 58.69% (+3 pct QoQ) | P/E 132.7x / P/B 36.6x / P/E Percentile 0%
Revenue, gross margin, and net margin all rose, realizing economies of scale. However, Q3 operating cash flow was negative CNY 0.084 billion, primarily due to strategic inventory buildup (inventory increased +41% QoQ to approx. CNY 11.7 billion by end of Q3, with prepayments of CNY 3.044 billion), not deterioration in collections. On Oct 26, Goldman Sachs maintained a Buy rating but lowered the target price from CNY 1,841 to CNY 1,680 (corresponding to 23x 2030 EBITDA, down from 27x), citing the company's guidance for Q4 sequential growth of no less than 13% and triple-digit revenue growth through 2028; simultaneously, they cut net profit forecasts for2026–2029 by 11%/3%/0%/0% and raised the 2030 forecast by 7%, characterizing this as "short-term bearish, long-term bullish."
Valuation Judgment: The P/E is at its lowest percentile over the past year, indicating the Q3 results have been digested. The real anchor lies in2027–2028; if revenue triples in three years, the P/E could fall back to around 30x. It is a strong-logic, low-margin-of-safety stock, highly sensitive to single-customer procurement timing and HBM supply—Goldman Sachs explicitly noted that Q3 revenue missing expectations stemmed from raw material tightness and major customer procurement rhythms.
SMIC 688981.SH | Rank 3 by Market Cap
Q3 report to be disclosed post-market on Nov 12. Using H1/Q2 metrics: H1 Revenue CNY 38.635 billion (+19.4%), Net Profit Attributable to Parent CNY 4.467 billion (+94.2%), Gross Margin 23.16%; Q2 Single-Quarter Revenue CNY 21.018 billion, Net Profit CNY 3.106 billion, Gross Margin 24.56% | P/E 115x / P/B Only 4.83x
A 115x P/E appears expensive, but the P/B is only 4.83x, making it the only "heavy asset, low P/B" stock among the ten. The essence of the high P/E is depreciation suppressing profits, not insufficient profitability—Q2 capacity utilization reached 93.7%, with Q3 guidance at 95%. Massive depreciation from mature node expansion lowers the profit base; once volume and prices rise together, profit elasticity is huge (already evidenced by H1 net profit +94%). Peer signals are positive: mainstream foundries have concluded Q3 pricing negotiations, orders are full, and year-end unit prices are guaranteed not to drop.
Conclusion: Do not use P/E for horizontal comparison; focus on P/B and capacity utilization cycle position. The valuation includes a strong strategic premium (core carrier of the domestic substitution theme). The announcement on Nov 12 and the briefing on Nov 13 are the most important recent verification windows.
Hygon Information Technology 688041.SH | Rank 4 by Market Cap
Q3 Revenue CNY 5.856 billion (+45.5% YoY / +15.6% QoQ) | Net Profit Attributable to Parent CNY 1.048 billion (-5.7% QoQ) | Gross Margin 58.73% (+3.84 pct QoQ) | P/E 115.3x / P/E Percentile 0%
Profit growth lagged revenue growth, primarily due to an R&D expense ratio of 29.77%. The key point is the significant sequential improvement in gross margin, pointing to improved margins for Hygon No. 4 CPUs and high profitability for Deep Computing No. 3 DCUs. Excluding CNY 0.268 billion in share-based payments in Q3, Q3 net profit attributable to parent would be CNY 1.316 billion, up +68.3% YoY, revealing stronger core business elasticity. Inventory stood at CNY 8.921 billion and prepayments at CNY 5.885 billion by end of Q3, indicating massive stockpiling, but operating cash flow was negative CNY 2.015 billion, the worst among the ten, representing the cost of "trading cash flow for capacity lock-in."
Valuation Judgment: Guohai Securities estimates net profits of CNY 5.016/10.063/17.569 billion for 2026–2028, corresponding to P/Es of 88.97/44.35/25.40x. Dual-engine logic: DCUs benefit from the ramp-up of domestic computing power, while CPUs are being re-rated due to the rise of agentic AI (the CPU:GPU ratio may narrow from 1:8 to 1:1; Hygon holds the only complete X86 license in China). The logic is the most "dual-engine," and performance is the most predictable, but cash flow is negative and the valuation has already fully reflected these factors.
Naura Technology 002371.SZ | Rank 5 by Market Cap
Q3 Revenue CNY 11.306 billion (Only +1.3% YoY / +14.9% QoQ) | Net Profit Attributable to Parent CNY 2.022 billion (+5.2% YoY / +16.5% QoQ) | Operating Cash Flow CNY 1.817 billion | P/E 60.3x / P/B 8.14x / P/E Percentile 45.8%
The near-zero YoY growth is the weakest in this table, but sequential improvement is obvious, indicating that the YoY base (last year's Q3 equipment delivery peak) is the main cause, rather than order deterioration. The real drag is upstream component delivery tightness causing shipment rhythm fluctuations, which is a supply constraint, not demand insufficiency—SEMI expects global equipment sales to reach $165.9 billion in 2026, a historic high (+23.2%).
Valuation Judgment: The P/E is at the 45.8th percentile over the past year, the only stock not in the extremely low percentile zone, suggesting the market has not yet priced in the sequential improvement. The anchor for equipment stocks is orders/contract liabilities, not current period profits. The combination of valuation cost-effectiveness and order visibility is optimal, representing a "low-position quality performer."
Advanced Micro-Fabrication Equipment (AMEC) 688012.SH | Rank 6 by Market Cap
Q3 Revenue CNY 3.635 billion (-3.7% QoQ) | Net Profit Attributable to Parent CNY 1.309 billion (-30.9% QoQ) | Adjusted Net Profit Only CNY 0.500 billion | P/E 40.7x
The biggest warning in this table: Of the CNY 1.309 billion net profit attributable to parent, approx. CNY 0.8 billion is non-recurring gains/losses (accounting for 61%), with adjusted net profit at only CNY0.500 billion; both revenue and net profit turned negative sequentially. Looking only at the +17.2% YoY revenue growth would severely overestimate operational strength. Etching is the segment with the highest localization rate (50%–65%), so medium-to-long-term order logic is not weak; short-term issues are revenue recognition timing and component delivery schedules.
Valuation Judgment: The 40.7x P/E is a figure "beautified" by non-recurring gains. Annualizing Q3 adjusted net profit suggests the core business P/E is far higher than 40x. One must cross-validate using adjusted net profit and operating cash flow, rather than directly comparing P/Es horizontally.
Montage Technology 688008.SH | Rank 7 by Market Cap
Q3 Revenue CNY 2.079 billion (+46.0%) | Net Profit Attributable to Parent CNY 1.240 billion (+162.0%) | Net Margin 58.61% | Operating Cash Flow CNY 1.570 billion (1.27x net profit) | P/E 50.3x / P/S 28.4x
The best earnings quality in this table: the only one among the ten to meet the triple standard of "high profit margin + cash flow exceeding profit + solid adjusted net profit." Drivers include DDR5 penetration, AI servers having 6–8 times the memory capacity of traditional servers, and incremental demand from super-node interconnects. With only CNY 0.186 billion in R&D expenses achieving a 58.6% net margin, it reflects strong pricing power.
Conclusion: The risk-reward ratio is the most balanced—combining growth certainty and earnings quality, with non-extreme valuation and no reliance on a single customer.
GigaDevice Semiconductor 603986.SH | Rank 8 by Market Cap
Q3 Revenue CNY 8.732 billion (+225.6% YoY / +18.4% QoQ) | Net Profit Attributable to Parent CNY 4.209 billion (+728.9% YoY / -22.0% QoQ) | Adjusted Net Profit CNY 4.551 billion > Net Profit Attributable to Parent | Operating Cash Flow CNY 4.076 billion | P/E 15.6x / P/B 2.36x
Adjusted net profit exceeding net profit attributable to parent indicates the core business is actually stronger than the headline, but the -22% sequential drop in net profit is one of the first signs of weakening momentum among memory stocks. This is not a demand slowdown, but the convergence of price hike slopes + the fading dividend of low-cost inventory—sell-side views also confirm that "module segments are beginning to diverge."
Valuation Judgment: A P/B of 2.36x is less than one-sixth of CXMT's (14.1x), and the P/E is the lowest in the entire table. Extreme undervaluation reflects two concerns: niche memory is more cyclical, and Fabless models cannot enjoy structural premiums at the HBM level. It is a typical "low valuation + cyclical elasticity" combination, but the sequential inflection point has appeared—if one believes the shortage continues in 2027–2028, the 15.6x P/E is attractive; if worried about a decline in 2027, beware the "low P/E trap."
MetaX-U 688802.SH | Rank 9 by Market Cap
Q3 Revenue CNY 1.500 billion (+367.1% YoY / +97.0% QoQ) | Net Profit Attributable to Parent CNY 0.027 billion (-96.3% QoQ) | Adjusted Net Profit CNY 0.308 billion > Net Profit Attributable to Parent | P/E 923x / P/S 87.7x
The most easily misread set in this table: Q3 net profit attributable to parent was only CNY 0.027 billion, down -96% sequentially, but adjusted net profit of CNY 0.308 billion exceeded the net profit attributable to parent (due to non-recurring losses), whereas Q2 net profit attributable to parent of CNY 0.711 billion included large non-recurring gains. The true trend is seen in adjusted net profit: Q3 single-quarter adjusted net profit of CNY 0.308 billion has already exceeded the H1 cumulative total of CNY 0.259 billion, indicating clear improvement in the core business. "Sequential -96%" does not equal deteriorating operations.
Valuation Judgment: A P/E of 923x and P/S of 87.7x are the highest in the table; the P/E has lost its meaning, requiring a switch to P/S or forward P/E. A P/S of 87.7x implies revenue needs to grow 5–10 times within 2–3 years to digest the valuation. The only hard logic supporting the high P/S is the penetration curve of domestic GPU self-sufficiency from 10% in 2021 → 42% in 2026 → 86% in 2030.
Moore Threads-U 688795.SH | Rank 10 by Market Cap
Q3 Revenue CNY 1.552 billion (+1773.9% YoY distorted base / +55.4% QoQ) | Net Profit Attributable to Parent CNY 0.049 billion | Adjusted Net Profit Only CNY 0.020 billion | Operating Cash Flow Negative CNY 1.140 billion | P/E -633x (Invalid) / P/S 37.8x
The +1774% YoY growth is due to an extremely small base last year; the +55.4% sequential growth is the credible metric. Although net profit attributable to parent turned positive, adjusted net profit was only CNY 0.020 billion, meaning the core business has not truly entered a profitable state; persistently large negative cash flow is typical of unprofitable growth stocks. A P/S of 37.8x is lower than MetaX's 87.7x, but with a slightly lower gross margin of 50.09% and later profit realization; a P/B of 12.65x is roughly equivalent to MetaX's 13.0x, indicating the market prices the asset side of both GPU companies similarly.
Conclusion: The stock with the latest profit validation and most restricted valuation methods. The core observation is whether adjusted net profit can stabilize and expand for two consecutive quarters, and when operating cash flow narrows; until then, any P/S is merely a scenario assumption.
Conclusion: Three Consensuses and Three Risks
First, look at the three sets of valuation paradigm comparisons:
Consensus: 1. The boom has not peaked—global semiconductor sales in August rose +144.3% YoY, marking 34 consecutive months of positive growth, with SEMI judging this will continue until 2028–29; 2. The core contradiction has shifted from "demand" to "supply" (JPMorgan); full orders are no longer a bonus, capacity and lead times are; 3. Profits are highly concentrated—the combined net profit attributable to parent for the first three quarters for 187 A-share semiconductor companies was approx. CNY 247.5 billion, with CXMT, Longsys, and GigaDevice contributing over 60%.
Risks: 1. Price hike slope convergence has appeared (DRAM sequential increases went from 80%→40%→20%; 12 out of 15 memory manufacturers saw Q3 net profit sequential growth rates decline); 2. Absolute valuation levels are not low (Shenwan Semiconductor P/E is at the 54.3rd percentile over 5 years, P/B at the 84.2nd percentile; individual stock P/Es at the 0th percentile over the past year are due to stock price corrections, not absolute cheapness); 3. Five out of the ten companies had negative Q3 operating cash flows.