Cambrian-U(688256.sh), known as "the first share of AI chips", went further and further on the road of loss.

on the evening of January 30, the performance forecast released by Cambrian showed that the operating income in 2023 is expected to reach 0.68 billion -0.72 billion yuan, slightly lower than that in the same period in 2022. The net profit loss is expected to be 0.756 billion -0.924 billion yuan, which is 26.47 to 39.84 percent lower than the same period last year. Non-net profit loss of 0.945 billion -1.155 billion yuan, compared with the same period last year, the loss narrowed by 26.87 to 40.17.

Although the amount of losses has narrowed, judging from its financial performance since its establishment, Cambrian shows no signs of turning losses. From 2017 to 2022, the company lost money year after year, with a cumulative loss of 4.12 billion yuan, plus 2023, a cumulative loss of nearly 5 billion yuan in seven years.

Seven consecutive years of losses

Since 2017, although Cambrian has continued to lose money, the scale of revenue has continued to expand. The latest performance forecast shows that the company's revenue decreased slightly in 2023, which is the first decline in revenue since the establishment of the Cambrian. Revenue in 2022 is 0.729 billion yuan.

The loss of net profit for the seventh consecutive year does not surprise the market. After all, since 2023, Cambrian's quarterly performance has been in a loss state, with a loss of 0.8 billion yuan in the first three quarters.

For the reasons for the loss reduction, Cambrian said it was the common reason for the reduction in management costs, research and development costs, and asset impairment losses. However, from the three financial indicators published, it is still not low.

Cambrian said it expects management costs of 0.135 billion to 0.165 billion yuan in 2023, down 44.38 to 54.49 percent from a year earlier. The main reason is that the company's share-based payment expenses decreased compared with the same period last year, resulting in a significant decrease in management expenses during the reporting period compared with the same period last year.

Research and development costs are expected to range from 0.999 billion yuan to 1.22 billion yuan in 2023, a decrease of 19.83 to 34.41 percent over the same period last year. The main reason is that according to the company's business planning, further improve the efficiency of research and development, optimize the allocation of resources, the reporting period of research and development expenses decreased compared with the same period last year.

The reduction in Cambrian R & D costs had raised market concerns in the first quarter of 2023. In this quarter, the company's R & D expenses were 0.235 billion billion yuan, a year-on-year decrease of 15.69; the proportion of R & D investment in operating income decreased by 130.3 percentage points. This is the "first reduction" in R & D expenses that have been increasing year by year since the Cambrian listing ".

The 21st Century Business Herald reporter previously reported that its R & D expenses were reduced and the "layoffs" were confirmed. Since last year, news of large-scale layoffs in Cambrian has been heard from time to time in the market. Some people who left Cambrian have confirmed to the 21st Century Business Herald reporter that "(company) layoffs have always been laid off because of pressure on performance."

Industry experts also told the 21st Century Business Herald reporter, "The bulk of R & D investment is human expenditure, and the decline in R & D investment can be confirmed to a certain extent by layoffs." It also said, "If layoffs are not taken into account, a reduction in R & D spending usually means a decline in innovation capacity. This expenditure mainly refers to the absolute amount of expenditure, not the proportion. If a project is a large amount of R & D in the early stage of a project into the payback period, the proportion of R & D expenditure may be reduced, but the absolute expenditure will not be reduced."

In addition to the layoffs, the company is also facing losses from inventory declines. Cambrian expects asset impairment losses of $0.117 billion to $0.143 billion in 2023, down 27.20 to 40.44 percent from a year earlier.

Share price halved from peak

At the beginning of the listing, Cambrian had the reputation of "the first share of AI chips" for a while, but due to the long-term downturn in performance, the stock price gradually fell. Until 2023, driven by concepts such as big model, computing power and AI, the Cambrian stock price was able to rejuvenate and once rose by more than 270 yuan per share.

Taking advantage of the stock price recovery, in the second half of 2023, a number of Cambrian venture capital shareholders liquidated their holdings and were criticized by the market. In order to stabilize market sentiment, in September 2023, Cambrian issued an announcement stating that Chen Tianshi, the actual controller and chairman and general manager, voluntarily promised that he would not reduce his holdings of the company in any way during the period of December 31, 2024. shares.

However, the reporter noticed that from the relevant regulations, there are already some restrictions on the reduction of unprofitable Cambrian holdings. The relevant regulations of the Science and Technology Innovation Board show that for companies that are not profitable at the time of listing, the controlling shareholder and actual controller are not allowed to reduce their holdings of pre-IPO shares within 3 years before the company achieves profitability. There are restrictions on the reduction ratio in the fourth and fifth years.

After the issuance of the new regulations on shareholding reduction, for listed companies that have broken or broken net, or have not paid cash dividends in the past three years, and the accumulated cash dividends are less than 30% of the average annual net profit in the past three years, the China Securities Regulatory Commission also requires, Controlling shareholders and actual controllers shall not reduce their holdings of the company's shares through the secondary market.

the actual controller's promise not to reduce its holdings was said to be "superfluous". Now, as the market returns to calm, its share price has fallen from its peak. On January 31, or affected by its 2023 results, Cambrian shares fell sharply again, closing at 110 yuan per share, down 5.9 per cent.

The stock price is a reflection of fundamentals. Judging from the operating conditions in Cambrian 2023, it is indeed in a more difficult situation. In addition to the layoffs, there have also been news of the Cambrian shutdown of the auto business.

In fact, since its listing, market participants generally believe that the road to commercialization in the Cambrian has not passed. The reporter noted that since 2019, Cambrian's major customers have changed frequently, and most of them are Chinese science and technology companies that are "from the same door" with Cambrian.

For example, in 2021, Cambrian disclosed that the largest customer was Jiangsu Kunshan High-tech Industry Investment and Development Co., Ltd., with sales of 0.45 billion yuan, accounting for 62.46 percent of the total annual sales. Later, in response to the regulatory inquiry letter, the company revealed that the company's largest outsourcing supplier was Zhongke controllable Information Industry Co., Ltd., one of the shareholders of the company was the Chinese Academy of Sciences Holdings Co., Ltd., and the company's supervisor Lu Walling was also the legal representative of Jiangsu Kunshan high-tech industry investment.

In 2022, Cambrian officially disclosed that the largest customer was Nanjing Science and Technology Innovation Investment Co., Ltd., with sales of 0.443 billion yuan, accounting for 60.81 percent of the total annual sales. In 2019, the company's largest customer is the intelligent computing platform (Phase II) project of the Bureau of Commerce of Zhuhai Hengqin New District Management Committee.