CXMT shares fall 7.8% even as the Chinese memory-chip maker forecasts up to 132.5 billion yuan in profit

Shares of ChangXin Memory Technologies, the Chinese maker of DRAM memory chips known as CXMT, fell 7.8% in Shanghai on Monday, Oct. 19, even though the company forecast a nine-month net profit of as much as 132.5 billion yuan and its chairman proposed a share buyback. The forecast reverses a loss a year earlier, but it landed in the middle of a global selloff in chip stocks.

What the company expects

In a filing with the Shanghai Stock Exchange on the evening of Friday, Oct. 16, Beijing time, CXMT said it expects net profit attributable to shareholders of 131 billion yuan to 132.5 billion yuan for January through September. That is about $19.58 billion at the low end, and it compares with a net loss of 5.28 billion yuan a year earlier.

It expects revenue of 265 billion yuan to 270 billion yuan, or about $39.61 billion to $40.36 billion, up from 32.08 billion yuan in the first nine months of 2025. That is more than eight times as much. The company said demand for AI computing power has grown rapidly since the second half of 2025, pushing the global DRAM market into short supply and driving prices sharply higher. It also credited its own capacity expansion and process upgrades for higher output per wafer and better capacity utilization.

The buyback proposal

In a separate filing the same evening, CXMT said Chairman Zhu Yiming had proposed that the company buy back 1 billion yuan to 2 billion yuan of its shares, about $150 million to $300 million, over 12 months. The shares would go to employee incentive plans or be canceled to reduce the company's registered capital. The plan still needs approval from the board or shareholders.

Why the shares still fell

CXMT shares closed at 41.52 yuan on Monday, down 7.8% from Friday's close of 45.02 yuan, after falling as much as 8.9% during the session. Chip stocks have been under pressure for a week on worries about how the AI build-out is being financed, and memory makers including Samsung Electronics, SK Hynix, Micron Technology, SanDisk and Kioxia have lost hundreds of billions of dollars of market value in that time.

The forecast also points to slower momentum. CXMT reported first-half revenue of 150.31 billion yuan and net income of 77.61 billion yuan in August. Subtracting those figures from the nine-month forecast implies third-quarter revenue of about 114.7 billion yuan to 119.7 billion yuan and net income of about 53.4 billion yuan to 54.9 billion yuan. By TickerGrove's calculation, using the midpoints, that is a net margin of about 46%, compared with about 52% in the first half. A technology fund manager quoted anonymously by the South China Morning Post said lower quarterly margins were a factor, but that the main issue was how investors were positioned after a crowded trade in technology stocks.

A challenger to Samsung and SK Hynix

CXMT, based in Hefei, accounted for 10% of global DRAM revenue in the third quarter, up from 5% a year earlier, according to Counterpoint Research data cited by CNBC. Last week it said it plans to release a new generation of DDR5 server memory by the end of the year, using a denser cell design that rivals are also pursuing. Its shares closed 2.8% lower on Tuesday, Oct. 13, after that announcement, which also weighed on global chip stocks.

Goldman Sachs analysts led by Giuni Lee wrote on Friday that the sharp drop in memory shares could mean the market has underestimated China's capacity ramp-up and potential for technology breakthroughs. They added that the market may also have overestimated China's progress, given the time needed for customer qualification, high-yield mass production and closing the gap in advanced products such as high-bandwidth memory.

A volatile debut

CXMT listed in Shanghai in July at an offering price of 8.66 yuan and closed its first day up 466%. The shares peaked at 61.8 yuan in August. Monday's close left them more than 10% below their first-day close and about a third below that peak.