Chinese AI Unicorn Cambricon to Raise USD403 Million in Private Placement, But Still No Profit in Sight
Dou Shicong
DATE:  Jul 01 2022
/ SOURCE:  Yicai
Chinese AI Unicorn Cambricon to Raise USD403 Million in Private Placement, But Still No Profit in Sight Chinese AI Unicorn Cambricon to Raise USD403 Million in Private Placement, But Still No Profit in Sight

(Yicai Global) July 1 -- Cambricon Technologies aims to raise as much as CNY2.7 billion (USD403 million) in a private placement of shares that will go towards enhancing its core business of smart chip designs and keep it ahead of the competition. But the Chinese chipmaker has no timetable for when it will start to turn a profit.

The firm will use CNY1.4 billion (USD209 million) of the proceeds from the sale of up to 80.2 million new shares in a stable process chip project, CNY810 million (USD120.94 million) in an advanced process chip project and the rest will go towards research and development as well as to supplement working capital, the Beijing-based company said yesterday.

However, as R&D requires a huge amount of investment, Cambricon is not sure when it will become profitable, it told Yicai Global.

The company’s net loss widened by 90 percent last year from the year before to CNY825 million (USD123 million), while revenue jumped 57 percent to CNY721 million, according to its latest annual report. And in the first quarter, the firm's net loss expanded by another 40 percent to CNY287 million.

Cambricon, which was one of the first AI unicorns to go public on the mainland, has seen its stock price tumble 80 percent in value from the peak reached four days after it listed in July 2020 as it continues to hemorrhage cash.

Cambricon’s share price [SHA:688256] closed down 3.1 percent at CNY62.68 (USD9.35) today, below its issue price of CNY64.39. The company's market capitalization is now CNY25.1 billion (USD3.7 billion), half of what it was a year ago.

China's smart chip market has maintained rapid growth in recent years and is expected to reach CNY85 billion (USD12.6 billion) this year and to double by 2025, Cambricon said, citing data from EO Intelligence.

Editor: Kim Taylor

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Keywords:   Cambricon,Private Placement,AI Chips