CXMT (688825.SS): Sequential QoQ growth ahead on AI driving DRAM demand; 3Q26 revenues +15%~20% QoQ; Buy

Goldman Sachs maintains Buy on CXMT (688825.SS). CXMT guided 3Q26 revenues at Rmb115bn–Rmb120bn, up 15%–20% QoQ, with the midpoint 30% above our previous estimates, which we attribute to strong AI-driven DRAM demand, clients' supplier diversification, and DRAM prices staying at high levels. 3Q26 net income was guided at Rmb53bn–Rmb55bn, up slightly QoQ, with the midpoint 17% above our prior estimate. We expect sequential QoQ revenue growth in 4Q26E and view CXMT as a key beneficiary of rising local DRAM demand, with strong earnings growth ahead driven by (1) strong AI demand in China lifting both server DRAM and HBM demand, (2) customers diversifying supplier networks to better secure supply, and (3) CXMT's capacity expansion. In September 2026, CXMT announced mass production of its Gen-5 DRAM technology platform (G5), which limits the Active-Area Half-Pitch to 11.95nm and shortens the core functional area height to 6,762nm, supporting better performance with higher efficiency, lower c