Goldman Sachs maintains Buy on Biren as next-generation AI chips, shipment growth and CSP penetration support earnings growth.
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Goldman Sachs maintains Buy on Biren as next-generation AI chips, shipment growth and CSP penetration support earnings growth.
The report argues that Biren is positioned to benefit from strong China AI spending through higher-performance, higher-ASP chips and an expanding customer base. Its 12-month HK$80.50 target price implies 110.6% upside from HK$38.22.
- Management expects revenue growth to be supported by product-mix improvement and rising AI-chip shipments.
- Biren is developing a next-generation chip with a local foundry partner, with revenue contribution expected in coming quarters.
- The firm highlights growing demand for multi-chip Superpod solutions and Biren's partnerships with optical-solution providers and AI-server ODMs.
- Goldman Sachs values the shares using a 36.3x 2030E EV/EBITDA multiple, discounted to 2027E at a 12.7% cost of equity.
Report interpretation
Overview
This CTO-visit note maintains Goldman Sachs' Buy rating on Biren. The central case is that China AI infrastructure spending, a ramp in shipments, higher-value products and broader CSP adoption can drive strong growth, while the target price is based on long-dated EV/EBITDA valuation assumptions.
Core views
Goldman Sachs hosted Biren's CTO in Shanghai on 8 September during its China AI Tour and says management remains positive on revenue growth. The report maintains Buy because it sees four connected drivers: an uptrend in local cloud capital expenditure, a ramp in AI-chip shipments, a product mix shift toward higher-performance AI chips with higher average selling prices, and expansion of the customer base toward cloud service providers. Management said Biren serves a range of Chinese customers, including leading China CSPs, which the report presents as evidence of its R&D capability and product performance. A key product catalyst is Biren's collaboration with a local foundry partner on a next-generation AI chip. Management expects this product to offer greater computing power and a higher ASP, with revenue contribution beginning in coming quarters. The report also highlights rising end demand for Superpod solutions, where electronic or optical connections among multiple AI chips improve overall computing efficiency. Biren is working with local optical-solution providers and AI-server ODMs to meet major clients' technical requirements; this ecosystem collaboration is part of the route to address larger customer deployments. The broader demand backdrop in the report is Goldman Sachs' China AI-chip total addressable market scenario analysis. For 2025-30E, it estimates CAGR of +142%/+69%/+6% in bull/base/bear cases, reaching US$4,123bn/US$678bn/US$66bn by 2030E. These cases imply 2030E shipments of 237m/39m/4m units and IT power demand of 196GW/32GW/3GW, respectively. The report therefore links Biren's earnings-growth outlook to the scale of China AI spending, faster shipments, a richer product mix and increasing CSP penetration. Goldman Sachs sets a 12-month target price of HK$80.50 using 36.3x 2030E EV/EBITDA, discounted back to 2027E at a 12.7% cost of equity. The selected EV/EBITDA multiple is derived from peers' forward EV/EBITDA relative to EBITDA year-on-year growth. Its forecast table shows revenue rising from RMB1,034.6m in 2025 to RMB2,759.5m in 2026E, RMB9,663.7m in 2027E and RMB21,868.6m in 2028E; EBITDA is forecast to turn positive at RMB656.9m in 2027E after losses in 2025 and 2026E. The principal downside risks stated are weaker-than-expected China AI-chip demand, stronger competition and wafer-supply restrictions that affect GPU-board shipments.
Analysis framework
The report combines management commentary from the CTO visit with an assessment of China AI infrastructure demand, product and customer developments, and long-term financial forecasts. It then applies a peer-derived forward EV/EBITDA multiple to 2030E EBITDA and discounts the result back to 2027E using a 12.7% cost of equity.
Methodology notes
Peer-derived forward EV/EBITDA valuation discounted back using cost of equity
Goldman Sachs applies a 36.3x 2030E EV/EBITDA multiple, selected from peers' relationship between forward multiples and EBITDA growth, then discounts the valuation to 2027E at a 12.7% cost of equity.
China AI-chip total addressable market scenario analysis
The report frames Biren's opportunity through bull, base and bear cases for China AI-chip market value, unit shipments and IT-power demand through 2030E.
Shipment ramp and higher ASP from product-mix upgrade
The earnings thesis depends on both greater AI-chip volumes and a shift toward higher-performance products that carry higher average selling prices.
Asset mapping & comparison
Structured mapping from thesis to named assets (strengths, weaknesses, peers, risks).
- Biren (6082.HK)The report identifies Biren as a beneficiary of China AI-chip demand, higher-performance product launches and CSP customer expansion.
- Strengths
- Management cited broad China customer coverage including leading CSPs, R&D capability, product performance, local foundry collaboration, and partnerships with optical providers and AI-server ODMs.
- Comparison
- The target EV/EBITDA multiple is derived from peers' forward EV/EBITDA versus EBITDA year-on-year growth.
- Risks
- Lower-than-expected China AI-chip demand, stronger market competition, and wafer-supply restrictions affecting GPU-board shipments.
Key data
- 12-month target priceHK$80.50Based on 36.3x 2030E EV/EBITDA, discounted back to 2027E at a 12.7% cost of equity.
- Share priceHK$38.22Price as of 9 September 2026 close.
- Implied upside110.6%Target-price upside from the reported share price.
- Revenue forecastRMB1,034.6m / RMB2,759.5m / RMB9,663.7m / RMB21,868.6m2025 / 2026E / 2027E / 2028E.
- EBITDA forecastRMB(1,187.4)m / RMB(866.2)m / RMB656.9m / RMB1,549.8m2025 / 2026E / 2027E / 2028E; EBITDA turns positive in 2027E.
- China AI-chip TAM CAGR+142% / +69% / +6%2025-30E bull/base/bear cases, respectively.
- China AI-chip TAM in 2030EUS$4,123bn / US$678bn / US$66bnBull/base/bear cases, respectively.
- 2030E implied shipments237m / 39m / 4m unitsBull/base/bear cases, respectively.
- 2030E implied IT power196GW / 32GW / 3GWBull/base/bear cases, respectively.
Impact & implications
The report sees Biren's prospective earnings growth as a result of the interaction between expanding China AI infrastructure spending, greater AI-chip volumes, higher ASPs from next-generation products and broader CSP adoption. Local partnerships across foundry, optical solutions and server ODMs are presented as important to meeting large-customer technical needs.
Risks
- China AI-chip demand could be lower than expected.
- Market competition could be stronger than expected.
- Wafer-supply restrictions could affect GPU-board shipments.
What to watch
- Revenue contribution from the next-generation AI chip in coming quarters.
- The pace of AI-chip shipment ramp-up and product-mix improvement.
- Expansion of Biren's customer base, particularly among China CSPs.
- Demand for Superpod solutions and execution with optical-solution providers and AI-server ODMs.