SHANGHAI FUDAN (01385) reported a recovery in high-reliability and storage demand, along with expansion in emerging sectors such as automotive and industrial applications. However, considering intense market competition and the impact of asset impairment losses in 2025, Everbright Securities adjusted its net profit forecasts for 2025-2027 to RMB 530 million, RMB 976 million, and RMB 1.191 billion (down 26.4%, down 1.1%, and up 7.2% from previous estimates, respectively), reflecting YoY growth rates of -7%, +84%, and +22%.

At the current closing price of HKD 39.5, the stock trades at 56x and 30x projected 2025/2026 P/E ratios. The firm maintained its "Buy" rating, citing accelerated domestic substitution of FPGA chips and a rebound in demand for memory products.

In the first three quarters, SHANGHAI FUDAN generated revenue of RMB 3.024 billion, up 12.7% YoY. Q3 revenue reached RMB 1.186 billion, surging 33.28% YoY, driven by strong sales in non-volatile memory chips (up 44% YoY), smart meter chips (up 42% YoY), and FPGA/other chips (up 34% YoY). Security and identification chip revenue rose 16% YoY in Q3.

Gross margin for the first nine months stood at 58.47%, up 3.42 percentage points YoY, while Q3 gross margin climbed to 61.06%, an 8.91-percentage-point increase, attributed to revenue growth and product mix optimization.

Net profit for the first three quarters fell 22.69% YoY to RMB 330 million, impacted by reduced government subsidies, lower VAT deductions, increased inventory write-downs, and intangible asset impairments. However, Q3 net profit jumped 72.69% YoY to RMB 137 million, with a net margin of 12%.