GigaDevice (603986.SH): 3Q26 beat; niche memory remains strong

GigaDevice reported its 3Q26 results. In 9M26, revenue reached CNY20.297bn (+197.1% y-y), with a gross margin of 66.2% (+27.6pp y-y), net profit of CNY11.066bn (+921.6% y-y), and net profit excluding non-recurring items of CNY9,434mn (+805.3% y-y). In 3Q26 alone, revenue reached CNY8,732mn (+225.7% y-y/+18.4% q-q), with gross margin at 70.3% (+29.6pp y-y/+3.8pp q-q). Net profit was CNY4,209mn (+728.9% y-y/-22.0% q-q), with the q-q decline mainly reflecting fair-value changes, while net profit excluding non-recurring items reached CNY4.55bn (+814.4% y-y/+31.0% q-q). The 3Q26 revenue, gross margin and net profit all exceeded our previous expectations, mainly driven by tight supply in the memory chip industry, rising memory product prices and sales volumes, and increased shipments of MCUs and other products. We raise our 2026/27/28F revenue forecasts by 25%/22%/17% to CNY27.9bn/CNY40.5bn/CNY46.6bn, and lift our net profit forecasts by 40%/23%/20% to CNY14.3bn/CNY17.2bn/CNY18.3bn. With 202