Biren 2H25 results beat expectations, gross margin rose to 55%, Goldman Sachs maintains Buy

Overview

This report is Goldman Sachs' company research on Biren (6082.HK). The core view is that Biren's 2H25 results were stronger than expected, with clear improvement in revenue, gross profit, and gross margin, while inventory and contract liabilities rose sharply, reflecting a solid order book, wafer supply support, and robust demand for AI chips. Goldman Sachs maintains a Buy rating and sets a 12-month target price of HK$54.

Core views

Goldman Sachs believes Biren's growth logic comes from three factors: first, 2H25 revenue grew 228% year on year, and the revenue ramp helped narrow operating expense ratio; second, the product mix shifted toward higher-margin compute boards, lifting gross margin from 50.9% in 2H24 to 55.2% in 2H25; third, inventory and contract liabilities at the end of 2025 increased 520% and 4,667% year on year, respectively, indicating that future revenue growth has strong order and supply-chain support. Although the company is still loss-making and its 2025 net loss was heavily affected by non-cash items, the adjusted net loss margin has improved significantly versus 2024.

Analysis framework

The report mainly uses half-year results comparisons, deviations of actuals versus Goldman Sachs forecasts, product-mix analysis, forward-looking indicators from orders and inventory, and a forward EV/EBITDA valuation framework to assess the company's fundamentals and target price. The view on growth relies not only on current revenue, but also on leading indicators such as contract liabilities, inventory, customer delivery forms, and wafer supply.

Methodology notes

• Valuation methodsEV/EBITDA discounted valuation

  Based on 2030E EV/EBITDA multiple and discounted to 2027E

  The 12-month target price of HK$54 is based on 46.6x 2030E EV/EBITDA and discounted to 2027E using a 12.7% cost of equity; the target multiple is derived from the relationship between peer forward EV/EBITDA and EBITDA growth.

• fundamentalsOrder and inventory leading indicators

  Contract liabilities and inventory are used to assess future revenue visibility

  Rising contract liabilities usually reflect customer prepayments or locked-in orders, while rising inventory in this report is interpreted as stronger wafer supply support and demand support; together they point to future revenue growth.

• factorGS Factor Profile

  Goldman Sachs factor profile

  Goldman Sachs Factor Profile compares individual stocks with the covered market and industry peers across dimensions such as Growth, Financial Returns, Multiple, and Integrated.

Asset mapping & comparison

Structured mapping from thesis to named assets (strengths, weaknesses, peers, risks).

• Biren(6082.HK)

  Core coverage name

  Strengths

  2H25 revenue and gross profit significantly beat expectations; gross margin increased to 55.2%; inventory and contract liabilities grew rapidly, indicating strong order and supply-chain support; AI chip demand growth provides revenue elasticity.

  Weaknesses

  The company remains loss-making, with large operating and net losses; earnings forecasts depend heavily on future revenue growth, product mix, and cost control.

  Comparison

  2H25 revenue grew 228% year on year versus 2H24 and rose sharply sequentially versus 1H25; gross margin was higher than both 2H24 and 1H25, and also well above Goldman Sachs' original forecast of 35.5%.

  Risks

  AI chip demand in China is weaker than expected, market competition is stronger than expected, and wafer supply constraints affect GPU board shipments.

Key data

• 2H25 revenueRmb976mUp 228% year on year, 10% above Goldman Sachs' forecast of Rmb886m.
• 2H25 gross profitRmb538mUp 256% year on year, 71% above Goldman Sachs' forecast of Rmb315m.
• 2H25 gross margin55.2%Higher than 50.9% in 2H24 and 31.9% in 1H25.
• 2H25 operating lossRmb604mNarrowed sequentially from the Rmb704m loss in 1H25.
• Inventory at end-2025Rmb949mUp 520% year on year, reflecting wafer supply support and stronger demand.
• Contract liabilities at end-2025Rmb77mUp 4,667% year on year, showing a strong order backlog.
• 2025 adjusted net lossRmb874mAdjusted net loss margin was -84%, an improvement from -228% in 2024.
• Target priceHK$5412-month target price.
• Current priceHK$28.36Biren price disclosed in the report.

Impact & implications

If Biren continues to deepen penetration among leading tech giants, especially customers with in-house system development capabilities, the share of higher-margin delivery formats such as compute boards may remain elevated, thereby supporting gross margin and revenue growth. The simultaneous rise in inventory and contract liabilities improves short- to medium-term revenue visibility, but the company still faces risks from losses, demand volatility, intensifying competition, and wafer supply constraints.

Risks

• AI chip demand in the China market is weaker than expected.
• Competition in the market is more intense than expected.
• Wafer supply constraints affect GPU board shipments.
• The company remains loss-making; if revenue growth or gross margin improvement falls short of expectations, valuation support may weaken.
• The target price depends on forward 2030E EV/EBITDA and discounting assumptions, which carry high long-term forecast uncertainty.

What to watch

• Changes in the revenue mix among compute boards, servers, and clusters.
• Whether inventory continues to convert into revenue, and whether any buildup risk emerges.
• Whether contract liabilities continue to grow and can be realized as future revenue.
• Progress in expanding leading tech giant customers, especially demand from Chinese cloud providers.
• The pace of wafer supply and GPU board shipments.
• Whether operating loss and adjusted net loss margin continue to narrow.