BR20X tape-out and domestic customer expansion form the medium-term growth theme

Overview

This report summarizes the investor meeting organized by Macquarie for Biren Technology’s management and previews the company’s interim results for FY2026. The analysts believe investor interest in the company is healthy, and that BR10X commercialization, next-generation BR20X tape-out, and expansion among domestic cloud service providers, telecom operators, and intelligent computing cluster customers are the main growth drivers over the next few years. Restrictions on domestic imports of advanced GPUs and rising AI computing demand may also drive improvements in prices and margins for domestic AI chips.

Core views

First, BR10X has entered a key domestic cloud service provider, showing that Biren’s products have been validated by a leading customer. Second, BR20X is expected to complete tape-out in the domestic supply chain in the coming months, and its chiplet architecture, high-bandwidth interconnect, and supernode integration are expected to enhance competitiveness. Third, domestic GPU and ASIC supply is tight, and selling prices for high-computing-power products may exceed RMB100,000, providing upside for revenue and gross margin after 2027. Fourth, the company remains in a high-investment phase; component costs such as HBM, R&D expenses, and tape-out costs will keep near-term losses continuing, but the model expects the company to become profitable in 2027.

Analysis framework

The report centers on minutes from the management investor meeting and combines the product roadmap, customer onboarding progress, domestic AI chip supply-demand conditions, and pricing trends to forecast 1H26 results and 2026–2028 financial performance, using a price-to-sales methodology to derive the 12-month target price.

Methodology notes

• Fundamental researchManagement interviews and company fundamental analysis

  Validate product, customer, and operating trends through management communication

  Based on information disclosed by management during the investor meeting, the report assesses BR10X customer adoption, BR20X tape-out progress, potential customer expansion, and domestic chip pricing trends.

• Earnings forecastRevenue, margin, and loss forecasts

  Infer performance from shipment scale, product prices, component costs, and R&D investment

  The analysts expect scale expansion to improve gross margin, but HBM costs, R&D expenses, and tape-out spending will still weigh on near-term profitability, and they forecast the company to turn profitable in 2027.

• Valuation methodsPrice-to-sales valuation

  Determine target value based on revenue forecasts and price-to-sales ratio

  Company disclosure indicates that the target price is based on a price-to-sales methodology; the report’s 12-month target price is HK$140.00.

Asset mapping & comparison

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

• Biren Technology (6082 HK)

  The Hong Kong-listed AI GPU company directly covered by the report, rated Outperform.

  Strengths

  BR10X has been adopted by a key domestic cloud service provider; BR20X features higher computing power, chiplet design, high-bandwidth interconnect, and supernode integration; benefits from domestic substitution and growth in domestic AI computing demand.

  Weaknesses

  Commercialization is still at an early stage, R&D and tape-out investment are high, component cost pressure such as HBM is significant, and short-term losses continue.

  Comparison

  Compared with overseas advanced GPUs subject to import restrictions, Biren has advantages in local supply chain and domestic customer expansion, but product maturity, ecosystem, and scaled delivery capability still need validation.

  Risks

  Intensifying competition, relaxation of overseas GPU import restrictions, further tightening of U.S. policy, delays in new product tape-out or mass production, and extremely high share price volatility.

Key data

• 1H26E revenueRMB1.2 billion1H25 was RMB59 million, up 1,937% YoY.
• 1H26E gross profitRMB612 million1H25 was RMB19 million, up 3,161% YoY.
• 1H26E gross margin51%Up 19.1 percentage points YoY, though economies of scale are partly offset by component costs such as HBM.
• 1H26E operating lossRMB563 millionLoss narrows by about 5% from RMB592 million in 1H25.
• 1H26E adjusted net lossRMB524 millionLoss narrows by about 5% from RMB552 million in 1H25.
• 2026E revenueRMB2.453 billionExpected to grow 137.1% YoY.
• 2027E revenueRMB8.080 billionExpected to grow 229.3% YoY, with adjusted profit of RMB1.091 billion.
• 2028E revenueRMB16.555 billionExpected to grow 104.9% YoY, with adjusted profit of RMB3.561 billion.
• Potential selling price of new high-computing-power productsAbove RMB100,000Management believes tight supply of domestic GPUs and ASICs may support higher average selling prices.
• 12-month target priceHK$140.00Expected total return is 345.3% relative to the HK$31.44 reference share price.

Impact & implications

If BR20X completes tape-out on schedule and is adopted by domestic cloud service providers, telecom operators, and intelligent computing cluster customers, Biren Technology may enter a phase of rapid revenue scaling and gross margin improvement. Growth in domestic AI demand and import restrictions strengthen the domestic substitution logic, while rising prices for high-computing-power chips would further amplify operating leverage. However, the current valuation depends on substantial growth and a turnaround to profitability after 2027; any delays in tape-out, mass production, customer validation, or supply chain progress could materially affect the target value.

Risks

• The company’s commercialization is still at a relatively early stage, and competition in domestic AI chips may continue to intensify.
• If China relaxes import restrictions on overseas GPUs, the supply-demand and pricing advantages of domestic chips may weaken.
• Further tightening of relevant policies by the U.S. government may affect advanced manufacturing, supply chains, or customer expansion.
• BR20X tape-out, mass production, and customer certification face risks of delay or underperformance versus expectations.
• Rising costs of key components such as HBM may offset gross margin improvement from scale expansion.
• R&D and tape-out spending are high, and the company may continue to incur losses in the near term.
• The stock volatility index is “very high,” and the price may fluctuate up or down by 60% to 100% within one year.

What to watch

• FY26 interim results to be announced at the end of August 2026, and whether revenue, gross margin, and losses meet expectations.
• Whether BR20X can complete tape-out in the domestic supply chain on schedule in the coming months.
• BR10X shipment scale at the key domestic cloud service provider and subsequent repeat purchases.
• Cooperation progress with new domestic cloud service providers, telecom operators, and local government intelligent computing cluster customers.
• Whether new high-computing-power products can achieve an average selling price above RMB100,000.
• HBM supply, component costs, and gross margin changes.
• Whether forecasts for rapid revenue growth and profitability in 2027 can be realized.