GigaDevice's underlying chip profit is still rising, but a RMB342 million one-off loss shows how far its reported earnings now swing with its securities investments.
GigaDevice, the Beijing designer of memory and microcontroller chips, said third-quarter net profit rose 728.93% from a year earlier to RMB4.21 billion as a shortage of memory chips lifted both its prices and its shipments. Revenue rose 225.65% to RMB8.73 billion, Daily Economic News reported from the company’s results, released after the market closed on October 29.
Profit fell about 22% from the second quarter’s RMB5.40 billion. The drop came from investment losses: the company booked a net non-recurring loss of RMB342 million in the quarter, so profit excluding one-off items, RMB4.55 billion, was about RMB342 million higher than reported profit. On that underlying measure, earnings rose 814.39% from a year earlier, and over nine months they reached RMB9.434 billion, up 805.26%.
The company gave a short explanation: "存储芯片行业供给紧张，公司存储芯片产品量价齐升，存储业务持续向好" (supply in the memory chip industry is tight, the company’s memory products rose in both volume and price, and the memory business continued to improve). It added that microcontrollers, the small processors that run cars, appliances and industrial equipment, and other product lines also shipped more.
Nine-month profit rose tenfold as margins widened
Nine-month revenue rose 197.11% to RMB20.30 billion. GigaDevice’s nine-month net profit of RMB11.07 billion was up 921.55% from a year earlier, on a gross margin of about 66%. The margin is a calculation from the report published by the 21st Century Business Herald, and is about 27.64 percentage points higher than a year earlier. Basic earnings per share for the period were RMB15.83.
Investment gains did much of the work earlier in the year. Fair-value changes and disposals of financial assets added RMB1.879 billion over nine months, but subtracted RMB353 million in the third quarter, Daily Economic News reported. The company said its year-to-date profit increase reflected higher revenue and gross profit and "公司持有的证券投资期末公允价上升" (a rise in the period-end fair value of securities it holds). Other equity investments on its balance sheet rose to RMB51.765 billion from RMB3.594 billion at the end of 2025, mainly because of the higher value of its stake in CXMT, the DRAM maker that listed on Shanghai’s STAR Market in July, according to Cailian Press. GigaDevice founder Zhu Yiming is also CXMT’s founder and chairman. GigaDevice has said changes in the value of that stake have no direct effect on its net profit, Sohu reported.
Cash generation kept pace with earnings. Operating cash flow reached RMB10.124 billion over nine months, up 463.81%, including RMB4.076 billion in the third quarter, up 386.47%. Inventory rose about 105% from the end of 2025 to RMB6.292 billion, and the company held RMB18.86 billion in cash. Total assets reached RMB87.655 billion, up 309.67% from the end of 2025, much of it reflecting the higher value of its equity holdings. Third-quarter total profit before tax was RMB4.742 billion, up 798.62%.
The shares are down two-thirds from their June peak despite the earnings
GigaDevice closed at RMB275.99 on October 29, down 4.79% for the day before the results were released, for a market value of RMB194.3 billion. The stock hit an intraday high of RMB846.66 on June 29 and has since lost about two-thirds of its value. Major shareholders Zhu Yiming and Ge Weidong did not change their holdings in the third quarter, Daily Economic News reported; Wang Ping, who acts in concert with Ge, trimmed her stake by 6,000 shares.
The share price has fallen even as quarterly profit set records, a sign that investors are weighing how long the memory shortage lasts. The same shortage has lifted earnings across China’s memory sector, including at CXMT, the country’s leading DRAM maker.
Memory contract prices for 2027 are the next signal
The quarter-on-quarter decline in reported profit came from investments, not from the chip business, where underlying profit kept rising. The question for investors is how long memory prices stay high. Signs that DRAM and NOR flash contract prices for 2027 are flattening would hit GigaDevice’s margins first; signs that the shortage extends into next year would support them.
GigaDevice’s securities investments add a second source of swings, since gains and losses on them flow into reported profit, as the third quarter’s RMB353 million loss showed. Its far larger CXMT stake, by contrast, does not move net profit directly. GigaDevice did not give a forecast for the fourth quarter, and its full-year results will show which of the two drives earnings at year end.