MetaX (688802.SS): 3Q26 revenues strong QoQ growth on new platform ramp-up; Growing order momentum supporting acceleration

MetaX guided 3Q26 revenues to grow at +279%-455% YoY (or +60%-134% QoQ) to Rmb1.2bn-Rmb1.8bn, with midpoint revenues 39% higher than our previous estimates. We attribute it to growing client traction, and accelerated ramp up of C500/ C600 shipment. The 3Q NI is guided at a loss of Rmb26m to net profit of Rmb105m, higher than our previous net loss estimates of Rmb65m, supported by larger business scale and improving profitability. Due to the growing HBM cost, we expect to see higher ASP for the company's GPU products ahead, and it continues to secure memory supply for product delivery. We view the profitability of AI chips and the local supply (capacity/ yield rate ramp up) as key factors to support sustainable growth ahead, and expect the industry AI chips to reach 5.9m / 21.2m / 39.2m units in 2026E / 2028E / 2030E in China in our base case. Maintain Buy on MetaX. The company has started the mass production of its C600 platform with enhanced performance and continues to penetrate new