Woofun AI reports that Changxin Technology, the leading DRAM manufacturer in China, has received its first coverage from Goldman Sachs less than a month after listing on the STAR Market. In the report titled "CHIPS IV: Accelerating China's Semiconductor Self-Sufficiency," Goldman Sachs assigned a "buy" rating to the company, establishing a core thesis centered on the acceleration of domestic semiconductor self-sufficiency through aggressive capacity scaling and technological advancement.

The valuation framework established on August 23 sets a 12-month target price of 129 yuan for Changxin Technology. At the time of the report's release, the company's P/E ratio based on 2027 forecasts stood at around 10 times. The 129 yuan target price implies a significantly higher P/E ratio of approximately 24 times for 2027, reflecting a premium placed on future growth potential rather than current earnings multiples. This pricing logic diverges from traditional semiconductor valuation models by embedding expectations of rapid market share capture and margin expansion into the current equity price.

Underpinning this valuation is a growth model extending through 2030, characterized by the doubling of wafer production capacity and substantial expansion in high-bandwidth memory (HBM) revenue. Goldman Sachs projects that gross margins will rise sharply from 41% in 2025 to 82% by 2030, driven by China's AI hash rate development and the diversification of customer supply chains. This margin expansion assumes not only improved yield rates but also sustained high DRAM prices amid tight supply conditions, creating a scenario where volume growth and price stability reinforce profitability.

Changxin Technology listed on the STAR Market on July 27 under stock code 688825, with a total A-share share capital of approximately 66.881 billion shares. Of this total, about 4.503 billion shares were available for trading initially, providing liquidity for institutional investors. According to the prospectus, the capital raised will be deployed to upgrade wafer manufacturing lines, advance DRAM technology, and fund cutting-edge research and development, laying the financial groundwork for the aggressive expansion outlined in the Goldman Sachs report.

Woofun AI data shows that the capacity expansion plan is supported by massive capital expenditure, with average annual spending from 2026 to 2030 projected to reach 84 billion yuan. This represents a significant increase from the approximately 50 billion yuan spent from 2022 to 2025, and exceeds the around 60 billion yuan allocated in 2024 and 2025. The firm predicts monthly wafer production capacity will grow from 270,000 wafers in 2026 to 447,000 wafers in 2028, ultimately reaching 665,000 wafers by 2030, more than doubling the 2026 baseline.

Driven by this capacity growth, Goldman Sachs expects Changxin's total DRAM supply to expand at a compound annual growth rate of 34% from 2026 to 2030, reaching 9.837 billion GB by 2030. By 2028, Changxin's traditional DRAM supply is projected to account for 41% of Samsung's supply and 50% of SK Hynix's supply, up from 28% and 35% respectively in 2025. A critical projection is that Changxin will meet 50% of China's DRAM demand by 2028, coinciding with a China DRAM market size forecast of 257 billion US dollars, growing at a compound annual growth rate of 50% from 2026 to 2028.

Supply chain dynamics are shifting as global leaders Samsung, SK Hynix, and Micron reallocate resources toward AI servers, server DRAM, and HBM, leaving gaps in traditional DRAM supply for smartphones, personal computers, networking devices, and automobiles. While Changxin's technology nodes lag behind global leaders, consumer electronics manufacturers are motivated to diversify suppliers to mitigate single-source risks.

However, geopolitical and trade restrictions remain a critical variable, potentially limiting overseas expansion despite willingness from some customers to test mobile DRAM and traditional DRAM products.

HBM technology presents both the highest growth potential and the greatest technical barriers for Changxin. Manufacturing HBM requires mastery of front-end DRAM chips, high-precision silicon vias, advanced node logic wafers, thermal management, and reliability testing. Goldman Sachs forecasts HBM revenue to begin in the fourth quarter of 2026, accounting for 2% of total revenue in 2026 and rising to 27% by 2030. HBM supply is expected to grow at a compound annual growth rate of 207% from 2026 to 2028, reaching 1.179 billion GB by 2028, though entry into U.S. customers' supply chains remains unlikely in the short term due to early-stage technology maturity.

Profitability drivers are anchored in a net profit compound annual growth rate of 47% from 2026 to 2030, with traditional DRAM revenue growing at 34% and HBM revenue at 166%. The 129 yuan target price was derived by assigning a target P/E ratio of 16.6 times for 2030 and discounting it to 2027 using an equity cost of capital of 12.7%. This valuation assumes successful upgrades to DDR5 and LPDDR6, alongside an operating expense ratio falling from 27.4% to 7.9%, reflecting operational leverage as scale increases.

The memory industry remains cyclical, posing risks if demand for AI or consumer electronics falls short, suppressing prices and margins. Competition from Samsung, SK Hynix, and Micron, who continue expanding capacity and developing next-generation products, may constrain Changxin's market share gains. Ultimately, the 129 yuan target price reflects a bold bet that capacity expansion, domestic substitution, and HBM upgrades will materialize simultaneously, requiring flawless execution across manufacturing, yield improvement, and customer certification in a geopolitically constrained environment.