Goldman Sachs maintains a Buy rating on Montage and raises A/H-share target prices to Rmb363/HK$510

Overview

This is a Goldman Sachs company research and earnings review report on Montage. The core view is that as agentic AI adoption increases, CPUs will take on more task management, orchestration, and memory management work related to inference, lifting demand for memory interface ICs in server memory modules; meanwhile, the company's new product pipeline in high-speed interconnect areas such as MRDIMM, PCIe, CXL, and optical interconnects is expected to extend the growth cycle.

Core views

The report maintains a Buy rating and turns more optimistic on the sustainability of growth. Goldman Sachs expects RCD revenue to grow at an 8% CAGR during 2025-2032E, while MRCD/MDB should achieve a 98% CAGR during 2025-2032E as MRDIMM penetration rises. The four new products contributed Rmb269mn of revenue in 1Q26, representing 19% of the interface IC segment; management expects PHY retimer and PCIe switch to tape out in 2026, while optical interconnect ICs are still in R&D.

Analysis framework

The report derives its target price by combining 1Q26 results, revisions to 2026-2032E earnings forecasts, changes in product mix, peer P/E versus net profit growth relationships, and assumptions for A/H-share valuation premiums. The A-share target price is based on a 45.2x 2030E discounted P/E, while the H-share target price is based on a 58.3x 2030E P/E, assuming a 29% H-A premium versus A-shares and a CNY/HKD exchange rate of 1.09.

Methodology notes

• Valuation methods2030E discounted P/E

  Estimate the 12-month target price based on forward earnings and the target P/E multiple

  The A-share target price of Rmb363 is based on a 45.2x 2030E discounted P/E; the target multiple is derived from the relationship between peer P/Es and net profit growth, and rolled forward to 2027E P/E and 2027-2028E EPS growth.

• Valuation methodsH-A premium

  Valuation premium of H-shares relative to A-shares

  The H-share target price of HK$510 is based on a 58.3x 2030E P/E, using the company's average H-A premium of 29% over the past 20 trading days and a CNY/HKD exchange rate of 1.09.

• Factor frameworkGS Factor Profile

  Comparison across growth, financial returns, valuation multiples, and overall factor percentiles

  Goldman Sachs Factor Profile compares individual stocks with covered stocks and industry peers across growth, financial returns, valuation multiples, and composite metrics.

Asset mapping & comparison

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

• 688008.SS

  Primary A-share covered name

  Strengths

  Memory interface ICs are supported by stronger AI server CPU inferencing workloads; the new product pipeline is rich; 2026-2032E earnings forecasts have been raised.

  Weaknesses

  The valuation multiple is already high, and the target price depends on long-term growth and higher gross margin assumptions.

  Comparison

  The A-share target P/E is 45.2x 2030E discounted P/E; the H-share uses a 29% H-A premium.

  Risks

  Slower-than-expected growth in the memory interface IC market, slower-than-expected new product adoption, and intensifying competition.

• 6809.HK

  Corresponding H-share listing

  Strengths

  It also benefits from the company's fundamentals and AI server demand, and the target price uses the company's own historical H-A premium.

  Weaknesses

  Upside is lower than for the A-share, and it is sensitive to H-A premium and FX assumptions.

  Comparison

  The H-share target P/E is 58.3x 2030E P/E, with a target price of HK$510, implying 23.5% upside.

  Risks

  A narrowing H-A premium, changes in liquidity and market sentiment, and valuation-linked volatility versus the A-share.

Key data

• 2026-2028E net profit CAGR38%The report expects this to be driven by demand for memory interface ICs and high-speed interconnect chips.
• 2025-2032E RCD revenue CAGR8%Supported by continued growth in general-purpose server and inferencing server demand.
• 2025-2032E MRCD/MDB CAGR98%Supported by rising MRDIMM penetration.
• 1Q26 revenue from four new productsRmb269mnMRCD/MDB, PCIe retimer, CKD, and CXL MXC combined, accounting for 19% of the interface IC segment.
• 2026-2032 net profit forecast revision+4% to +10%Mainly driven by higher revenue and higher gross margin.
• 2026E revenueRmb8,122mnReport P&L forecast, corresponding to 49% year-on-year growth.
• 2026E net profitRmb3,811mnReport P&L forecast, corresponding to 70% year-on-year growth.
• 2026E gross margin67.3%Higher gross margin driven by a larger contribution from new products.
• A-share target price and upsideRmb363.00; 50.8%Price reference is the closing price of Rmb240.70 on 2026-05-12.
• H-share target price and upsideHK$510.00; 23.5%Price reference is the closing price of HK$413.00 on 2026-05-12.

Impact & implications

If the report's assumptions materialize, Montage's growth drivers will gradually expand from traditional RDIMM memory interfaces to higher-end interconnect products such as MRDIMM, PCIe switch, CXL, and optical interconnects, benefiting both revenue mix and gross margin. The higher valuation reflects the market's potential to assign the company stronger AI server and high-speed interconnect growth characteristics.

Risks

• Growth in the memory interface IC market falls short of expectations.
• New product launches are slower than expected.
• Competition is more intense than expected.
• Forward valuation assumptions and high gross margin assumptions do not materialize.
• Changes in the A/H premium, FX, or market risk appetite affect target price realization.

What to watch

• The actual pull from agentic AI and CPU inferencing workloads on server memory module demand.
• Changes in RCD, MRCD/MDB, and MRDIMM penetration.
• Progress on PHY retimer and PCIe switch tape-outs in 2026.
• R&D progress, customer adoption, and volume ramp timing for CXL MXC and optical interconnect ICs.
• New product revenue contribution, gross margin trend, and annual price-cut pressure.
• Whether 2026-2032E revenue, net profit, and EPS forecasts continue to be revised upward.