On August 30, Cambrian (688256.SH) released its first half 2023 results. The financial report shows that the company's operating income in the first half of 2023 was 0.114 billion yuan, a year-on-year decrease of 33.37; the net profit attributable to shareholders of listed companies was -0.545 billion yuan, compared with -0.622 billion yuan in the same period last year.

Chen Tianshi, chairman and general manager of Cambrian, said that in the first half of 2023, due to the influence of the supply chain, Cambrian adjusted its sales strategy and gave priority to customers with higher gross profit and better credit, resulting in a decline in operating income in the current period. Cambrian will continue to focus on technological innovation in the field of artificial intelligence chip design, with excellent product energy efficiency, good service awareness, and constantly build and improve the ecology, actively expand market share, accelerate the scene landing.

Continued loss

Cambrian's main business is the research and development, design and sales of artificial intelligence core chips in various cloud servers, edge computing equipment and terminal equipment. its main products are cloud intelligent chips and accelerator cards, training machines, edge intelligent chips and accelerator cards, terminal intelligent processors IP and supporting software development platforms for the above products. At present, the company's main product lines include cloud product lines, edge product lines, IP licensing and software. In 2020, it landed on the capital market with the title of the first share of AI chips, but business conditions have not improved, and the listing has continued to lose money for three years.

according to statistics, from 2017 to 2022, Cambrian recorded net losses of 0.381 billion yuan, 0.041 billion yuan, 1.179 billion yuan, 0.435 billion yuan, 0.825 billion yuan and 1.257 billion yuan respectively, excluding non recurring gains and losses of 0.029 billion yuan, 0.172 billion yuan, 0.377 billion yuan, 0.659 billion yuan, 1.111 billion yuan and 1.579 billion yuan.

In the first half of this year, the Cambrian operating income was about 0.114 billion yuan, a year-on-year decrease of 33.37; the net profit loss attributable to shareholders of listed companies was about 0.545 billion yuan, compared with a loss of 0.622 billion yuan in the same period last year; net profit loss after deducting non-recurring gains and losses 0.641 billion yuan; Basic earnings per share loss of 1.34 yuan.

In the semi-annual report, Cambrian said that due to the influence of the supply chain, the company adjusted its sales strategy in the first half of the year, giving priority to customers with higher gross profit and better credit, resulting in a decline in operating income in the current period.

Relevant data show that the total gross profit of the Cambrian in the first half of the year was 81.1097 million billion yuan, with a gross profit margin of 70.86, and the gross profit margin increased by 15.93 percentage points over the same period last year.

Although the Cambrian fell into the "quagmire" of losses and failed to go ashore for a long time, it still maintained efficient R & D investment to enhance the core competitiveness of core processor chips in the field of artificial intelligence and build technical barriers. During the reporting period, Cambrian invested 0.482 billion yuan in research and development, accounting for 421.56 percent of operating income. At present, the company has a R & D team of 980 people, accounting for 77.47 of the total number of employees, and more than 77.04 percent of R & D technicians have master's degree or above. However, it is worth noting that the number of people in the same period last year was 1207, down 227 from the same period last year.

In this regard, Chen Tianshi said that the company fully evaluated the development of the industry and the market, and adjusted each business line based on historical and estimated input-output data. At present, the R & D team has a reasonable structure and comprehensive skills, which can strongly support the company's technology Innovation and product development.

Power Intelligent Computing Cluster System Business

As a world-renowned emerging company in the field of smart chips, Cambrian can provide a series of smart chip products and platform-based basic system software with integrated cloud and edge, software and hardware collaboration, training and reasoning integration, and unified ecology. Cambrian generates business revenue mainly by providing customers with chip and accelerator card products, training machines, intelligent computing cluster systems, IP licensing and software.

Among them, Cambrian's intelligent computing cluster system business is based on Cambrian cloud product line products. In recent years, Cambrian has won many intelligent computing cluster system businesses.

in June 2023, Cambrian won the bid for the intelligent computing center project, a new infrastructure construction project of Shenyang Automobile City of Shenyang Dadong District Urban Construction Bureau, with a bid amount of 0.155 billion yuan.

previously, cambrian successfully won the bid for the Nanjing intelligent computing center project (2. phase iii) intelligent computing equipment (phase ii) project in 2022. the newly launched xuansi 1001 intelligent accelerator (MLU-X1001) was used as one of the core computing power units, integrating supporting software and hardware, and finally forming an intelligent computing cluster system to be delivered to customers, realizing an income of 0.443 billion yuan.

In addition, in the past three years, Cambrian has also won the intelligent computing cluster system business such as Xi 'an Fengdong and Jiangsu Kunshan, and the intelligent computing cluster system business has been expanded in many provinces and regions.

cambrian financial director and board secretary ye kanyin said that the profit-making mode of the intelligent computing cluster system business is to use the company's own cloud intelligent chip products and basic system software platform to integrate and deliver the income from the complete set of software and hardware systems of the intelligent computing cluster for customers. the company does not directly engage in related operations.

Chen Tianshi said that the intelligent computing cluster system business has a strong competitive advantage in the market. On the one hand, the company's intelligent computing cluster system can be applied to customers with relatively weak technical ability of artificial intelligence application deployment, and can provide services according to their requirements, which reduces the threshold for customers to develop and deploy intelligent applications. At the same time, the company's unified basic system software platform can significantly improve the operation efficiency of the intelligent computing cluster system, and output the computing power in the form of cloud computing, on the other hand, the company has successfully implemented projects with market influence and good reputation in the early stage, and sufficient project experience is conducive to the company's continued development of related business in this field.