Produced by Leidachaihongtu, written by Li Yihui, edited by Shenhai

It is not uncommon for unidentified individuals to pose as experts from listed companies to participate in events in the A-share market. This time, it's Cambrian, the "first AI chip stock."

On the evening of September 5, Cambrian issued a statement on its WeChat account stating that the "Cambrian experts" appearing at various investor-oriented institutional interviews and exchange meetings in the market were all imposters. The false information was subsequently widely disseminated and has caused serious negative impacts.

On the same day that the company made its statement, Cambrian's share price fell by 13.48%, erasing 13.46 billion yuan in market value in a single day.

On July 20, 2020, Cambrian successfully landed on the STAR Market after just 4 months of review, becoming the "first AI chip stock" in the A-share market. However, four years later, the company is still mired in losses. In the first half of this year, the company continued the downward trend in revenue and net loss seen last year. Since 2020, Cambrian's cumulative net loss after deducting non-recurring items has reached 5 billion yuan.

Cambrian has not yet given a timeline for profitability. The company stated in its financial report that it has not yet achieved profitability and has accumulated uncompensated losses, primarily due to its significant R&D investments aimed at ensuring high-quality iterations of its smart chip products and basic system software platforms, while maintaining a technological lead in a competitive market.

The founder of Cambrian is Chen Tianshi, a former researcher and doctoral supervisor at the Institute of Computing Technology, Chinese Academy of Sciences. Cambrian's successful IPO brought him billions of yuan in wealth. However, Chen Tianshi now faces significant challenges as the company has been included on the U.S. Department of Commerce's Bureau of Industry and Security's (BIS) Entity List for export controls since the end of 2022, causing ongoing supply chain disruptions.

Cambrian publicly exposes imposters

Market data shows that Cambrian's share price gradually declined in the afternoon of September 5, plunging by more than 10% in just half an hour, with the largest intraday decline exceeding 14%. Trading volume for the day reached 3.2 billion yuan.

According to media reports, on the same day, on an investor communication platform, some investors attributed the plunge to the postponement of a smart computing tender by a certain operator.

Analysts pointed out that rumors of the postponement of the smart computing tender by the operator may have triggered the plunge. As Cambrian's products are widely used in cloud servers, edge computing devices, and other fields, the operator's related business has a significant impact on the company. If the tender is postponed, it may affect Cambrian's future business orders and revenue expectations, leading to a decline in investor confidence.

In response to inquiries about the reasons for the stock price volatility, Cambrian's investor relations department responded that the company is operating normally and will certainly disclose any major matters in the form of announcements. Regarding rumors in the market, Cambrian stated that it is uncertain about the source of the information and that specific details should be based on the company's announcements and publicly disclosed information.

On the evening of September 5, Cambrian issued a statement on its WeChat account stating that the company had noticed that someone had participated in an exchange with institutional investors at a brokerage strategy meeting under the guise of a "Cambrian expert," and that the related false information had been widely disseminated and had caused serious negative impacts.

Cambrian stated that after investigation, the "expert" was found to be an imposter posing as a company representative for the exchange, with unclear motives. The company reserves the right to pursue legal action against them. Prior to this, the company had also noticed that several individuals claiming to be "Cambrian experts" had frequently participated in institutional interviews and exchanges, spreading false and misleading information about the company.

In the statement, Cambrian indicated that it has strict internal rules and regulations prohibiting employees from accepting external interviews or participating in investor exchanges. The "Cambrian experts" appearing at various investor-oriented institutional interviews and exchange meetings in the market are all imposters.

According to Tianyancha App, Cambrian was established in 2016 and is located in Beijing. It was listed on the STAR Market on July 20, 2020.

After going public, Cambrian's share price did not stay high for long. In 2022, its share price hovered around 50 yuan, earning it the nickname "peaking upon listing."

In 2023, the advent of large models marked a turning point for the AI industry. As a popular stock in the AI chip sector, Cambrian rebounded from its lows, and its share price returned to the 200 yuan level.

As the share price rose, Cambrian's shareholders began selling their shares. On June 8, 2023, Cambrian announced that Nanjing Zhaoyin and Hubei Zhaoyin had sold 3.1146 million and 1.5395 million shares, respectively, from February to June, for a total of 388 million yuan and 191 million yuan. After the sales, neither shareholder held any Cambrian shares.

On August 25 of the same year, Cambrian announced that Paleozoic Ventures had sold 5.9754 million shares of Cambrian from March 23 to August 24, cashing out 1.07 billion yuan. After the sale, the shareholder no longer held any Cambrian shares.

A review of the company's past announcements reveals that Cambrian last disclosed shareholder sales on September 22, 2023. According to the disclosure at that time, the company's shareholder, SDIC (Shanghai) Venture Capital for Scientific and Technological Achievements Commercialization (L.P.), had completed the sale of 7.3987 million shares, cashing out 1.481 billion yuan. After the sale, SDIC Venture Capital held only 1,176 Cambrian shares, essentially completing its liquidation.

With Intensive reduction of holdings of shareholders, Cambrian's share price had halved from its year-to-date high by early November 2023. Entering 2024, amid escalating export controls on high-end chips, the market anticipated opportunities for Cambrian from domestic AI computing demand, and the company's share price experienced another surge, rising nearly 60% year-to-date as of September 6, with a total market value of 89.8 billion yuan.

The boss behind it is worth 16 billion yuan

Public information shows that Cambrian was founded by Chen Tianshi and Chen Yunji, two brothers who worked together at the Institute of Computing Technology, Chinese Academy of Sciences. Initially, the company chose to enter the market through IP licensing, focusing on chip design. Its collaboration with Huawei brought significant attention to the company.

Born in 1985, Chen Tianshi is known in the media as a "genius teenager," having successfully enrolled in the Young Gifted Program at the University of Science and Technology of China (USTC) at the age of 16 in 2001.

After receiving his Ph.D. in Computer Science from USTC in 2010, Chen Tianshi served as a researcher at the Institute of Computing Technology, Chinese Academy of Sciences, becoming the youngest doctoral supervisor at the time.

In 2016, at the age of 31, Chen Tianshi ventured into entrepreneurship, founding Cambrian. In the early stages, it was difficult for Cambrian to secure investments until it encountered Liu Qingfeng, a 1991 alumnus of USTC, whose company iFLYTEK invested 10 million yuan in Cambrian.

Regarding his decision to pursue entrepreneurship instead of continuing his academic career, Chen Tianshi later said that a traditional view was that attending USTC meant being trained to become a scientist, including his own goal of pursuing research for life. However, his views have since changed. "USTC students should not have a single value system and should not feel unsuccessful if they do not become scientists," he said.

As an academic entrepreneur, Chen Tianshi's transition to the business world has proven successful. The following year, Cambrian secured a significant partnership with Huawei. In September 2017, Huawei unveiled the world's first AI processor, the Kirin 970, which incorporated Cambrian's embedded IP for its AI chip.

With Huawei's backing, IP licensing became Cambrian's primary source of revenue. However, this collaboration did not last long as Huawei began developing its own chips in 2019.

Subsequently, in collaboration with the Chinese Academy of Sciences, government IDC projects became Cambrian's new backbone. According to the company's prospectus, 80% of Cambrian's 2019 revenue of 440 million yuan came from two government IDC projects. In 2018, its terminal smart processor IP business, which contributed 99.7% of its revenue, fell to 15% in 2019 due to the loss of its major customer, Huawei.

Despite Doubtful voices , Cambrian successfully landed on the STAR Market in a "lightning-fast" process. Since going public, the company's share price has fluctuated, and its founder Chen Tianshi's wealth has fluctuated significantly. However, with the share price rebound this year, his wealth has increased substantially.

According to the 2024 Hurun Global Rich List, Chen Tianshi's net worth is 16 billion yuan, an increase of 8.5 billion yuan from the previous year.

Continued losses since 2017

In terms of performance, Cambrian has consistently incurred significant losses, according to disclosed data.

Data from iFinD shows that before going public, Cambrian's revenue from 2017 to 2019 was 7.84 million yuan, 117 million yuan, and 444 million yuan, respectively. During the same period, its net profit attributable to shareholders was -381 million yuan, -41 million yuan, and -1.179 billion yuan, respectively.

After going public, Cambrian raised a total of 4.254 billion yuan through direct financing (including 2.582 billion yuan from its IPO and 1.672 billion yuan from private placements). However, this has not significantly improved the company's profitability, and revenue has even declined.

From 2020 to 2023, Cambrian's revenue was 459 million yuan, 721 million yuan, 729 million yuan, and 709 million yuan, respectively. During the same period, its net profit attributable to shareholders was -435 million yuan, -825 million yuan, -1.257 billion yuan, and -848 million yuan, respectively.

The latest half-year report shows that in the first half of this year, Cambrian's revenue was 64.7653 million yuan, a year-on-year decrease of 43.42%. Its net profit attributable to shareholders was -530 million yuan, compared to a loss of 545 million yuan in the same period last year. Its net profit after deducting non-recurring items was -609 million yuan, compared to a loss of 641 million yuan in the same period last year.

Including the first half of this year, Cambrian's cumulative net loss after deducting non-recurring items since 2020 has reached 5.001 billion yuan.

Regarding the reasons for the significant loss despite relatively low revenue in the first half of the year, the company stated in its financial report that it was due to adverse factors in the supply chain, such as being included on the "Entity List."

According to media reports, in December 2022, 36 entities, including Cambrian, were added to the U.S. Department of Commerce's Bureau of Industry and Security's (BIS) Entity List for export controls.

In its 2022 annual report, Cambrian stated that the impact of this matter on its R&D was still limited, as its core technologies were independently developed by Cambrian and owned proprietary intellectual property rights, which would not have a significant adverse impact on its product development or core competitiveness.

However, in its half-year report for 2023, Cambrian acknowledged that being included on the "Entity List," along with some of its subsidiaries, posed risks to the stability of its supply chain. As a fabless company, its suppliers include IP licensors, server manufacturers, wafer fabs, and packaging and testing facilities. The highly specialized and technically demanding nature of the integrated circuit industry chain, coupled with the inclusion on the "Entity List," has created supply chain risks for the company.

In addition, Cambrian acknowledged in its financial report that it had not yet achieved profitability and had accumulated uncompensated losses. The main reason was the company's significant R&D investments aimed at ensuring high-quality iterations of its smart chip products and basic system software platforms, while maintaining a technological lead in a competitive market.

Data shows that in the first half of 2024, Cambrian invested 447 million yuan in R&D, accounting for 690.92% of its revenue.

Will Cambrian succeed in exchanging tomorrow's prospects for today's technological investments amidst fierce market competition? Radar Finance will continue to follow this story closely.