Hygon Information Technology Co., Ltd. (688041)

Individual Stock Analysis Report | Industry: Semiconductors — Digital Chip Design (CPU/DCU) | Report Date: September 13, 2026 | As of 2026-09-11 close (markets closed on weekends; research notes compiled on 2026-09-13)

This report is automatically compiled and generated by AI based on public information, for reference only, and does not constitute investment advice.

1. Core Summary

Hygon Information (688041) disclosed its 2026 interim report on August 13, 2026. In 2026H1, it achieved operating revenue of RMB 9.099 billion, up 66.52% year-on-year, net profit attributable to shareholders of RMB 1.798 billion, up 49.69% year-on-year, and non-GAAP net profit attributable to shareholders of RMB 1.631 billion, up 49.67% year-on-year. Multiple brokerages commented it as "in line with expectations" or "in line with previous guidance." In 2026Q2 alone, revenue was RMB 5.065 billion (up 65.32% YoY, up 25.58% QoQ), and net profit attributable to shareholders was RMB 1.111 billion (up 59.78% YoY, up 61.75% QoQ), with single-quarter revenue and profit hitting record highs. However, the scissors gap between revenue and profit growth widened — 2026H1 gross margin was 55.21%, down significantly from approximately 60% in the same period last year (approximately -4.94pct YoY). The company attributed this to changes in product mix and rising prices of upstream raw materials and storage auxiliary materials; 2026Q1 net profit attributable to shareholders growth (+35.82%) was significantly lower than revenue growth (+68.06%), and CITIC Securities noted that excluding share-based payment, Q1 net profit attributable to shareholders growth reached +74.86%.

Operating quality metrics exhibit a "coexistence of high growth and high capital occupation" characteristic: 2026H1 net cash flow from operating activities was -RMB 428 million (down 119.64% YoY, compared to +RMB 2.177 billion in the same period last year), which the company explained as increased inventory reserves and higher raw material procurement expenditures; institutions interpreted this as active stockpiling to support accelerated H2 delivery. Period-end inventory was RMB 7.518 billion, prepayments were RMB 4.771 billion (a historical high), and contract liabilities dropped from RMB 2.019 billion at the beginning of the year to RMB 19 million. R&D investment was RMB 2.652 billion, up 55.05% YoY, accounting for 29.15% of revenue (31.31% in the same period last year). R&D personnel numbered 3,007, accounting for 80.83% of employees. At end-2025, accounts receivable were RMB 4.03 billion, up 77% YoY, higher than the revenue growth of 56.9%, and the largest customer's accounts receivable proportion also exceeded 50%. For full-year 2025, high-end processor revenue was RMB 14.36 billion, accounting for 99.90%, with a gross margin of 57.78%; full-year 2025 gross margin was 57.78%, down 5.92pct from 63.72% in 2024; domestic revenue accounted for 99.90%, with the business structure exhibiting high concentration in a single product line and a single region.

At the governance and share capital level, on September 11, 2026, the 25th meeting of the second board of directors approved multiple proposals in a concentrated manner and disclosed them on September 12: it plans to cancel 520,125 shares (0.02% of total share capital) in the repurchase special account and correspondingly reduce registered capital, with total share capital decreasing from 2,324,338,091 shares to 2,323,817,966 shares; it plans to use remaining over-raised funds of RMB 329.9684 million (of which over-raised funds of RMB 287.271 million + net interest of RMB 42.6974 million) to permanently supplement working capital, after which all IPO fundraising will have been fully utilized; it amended the "Articles of Association" and will handle industrial and commercial registration changes, and amended the "Related Party Transaction Management System"; it nominated 6 non-independent directors (including Li Jun, Sha Chaoqun, etc.) and 4 independent directors for the third board of directors. All of the above proposals must be submitted to the 2026 Second Extraordinary General Meeting scheduled for September 28, 2026, for deliberation, with the articles amendment and capital reduction being special resolution proposals. It is worth noting that after the previously announced termination in December 2025 of the absorption merger of Sugon (share exchange ratio 1:0.55, valued at approximately RMB 110 billion), the personnel and equity ties between Hygon and Sugon (Sugon holds 27.96%, Li Jun remains a director candidate) continue.

At the market level, as of the 2026-09-11 close, Hygon Information traded at RMB 230.89, down 0.64% (the semiconductor sector was down approximately 2% over the same period, with the stock relatively resilient), with a total market capitalization of approximately RMB 536.666 billion, a TTM P/E of 170.81, and a P/B of 21.15. The stock price declined for eight consecutive trading days from RMB 247.21 on 9-02, with the closing price below all of MA5 (235.73), MA10 (242.01), and MA20 (246.33) in a bearish alignment; the chip profit ratio was only 12.78%, and the 70% cost range of RMB 236.26–340.42 was above the current price; from 9-07 to 9-11, main force capital saw net outflows for 5 consecutive trading days totaling approximately RMB 1.21 billion (Securities Star data), but hot money continued to flow in to offset. Margin financing balance was RMB 8.642 billion, accounting for 1.60% of free-float market cap, below the market average of 3.95%, though the absolute scale of margin balance remains large.

2. Company Overview

2.1 Basic Information

2.2 Main Business and Product Layout

• Hygon CPU (General-Purpose Processor): x86 instruction set compatible, divided into Hygon 7000/5000/3000 series, generational iteration (Hygon No. 1 and No. 2 already commercialized, No. 3/No. 4 evolving); supports international mainstream OS, databases, virtualization, cloud platforms
• Hygon DCU (Coprocessor): GPGPU architecture, "CUDA-like" environment, ROCm ecosystem compatible, self-developed DTK software stack; targeting large model training/inference, scientific computing, big data processing, series is the 8000 series (Deep Calculation No. 1 already commercialized, Deep Calculation No. 2 under development/advancing)
• Business Model: Fabless (no wafer fab), chip specification definition, design, verification, and layout delivery completed independently by the company; wafer processing, packaging and testing all outsourced; sales primarily direct, with a small amount of distribution
• Revenue Structure (East Money main business composition): Full-year 2025 high-end processor revenue RMB 14.36 billion, accounting for 99.90%, gross margin 57.78%; domestic (including Hong Kong, Macau, Taiwan) revenue accounted for 99.90%; 2026H1 high-end processor revenue RMB 9.097 billion, accounting for 99.98%, gross margin 55.21%, technical services RMB 1.981 million (0.02%, gross margin 63.80%), domestic 100% — single product line, single region, extremely concentrated business structure
• Ecosystem/Strategic Actions: In 2025, launched the "dual-chip strategy," opening the CPU interconnect bus protocol HSL (open bus protocol, IP reference design, instruction set) + opening the DCU self-developed software stack; the "Photosynthesis Organization" aggregates over 6,000 partners, completing over 15,000 software and hardware compatibility tests; DCU has adapted to 365 mainstream large models including DeepSeek, Qwen3, Hunyuan, Zhipu, and has landed in over 20 key industries and 300+ application scenarios (as of end-2025, all self-disclosed by the company in its annual report, not third-party verified data)

2.3 Industry Chain Upstream and Downstream Position and Cost-Profit Structure

Hygon Information is a Fabless chip design company, positioned in the "chip design (IP/architecture + ecosystem)" segment slightly left of center on the smile curve, being neither an upstream resource nor a downstream brand OEM. Its industry chain characteristic is "high gross margin, high squeeze": gross margin has long been in the 55%–64% range, far higher than midstream manufacturing/OEM segments (compared to Sugon's IT equipment gross margin of 27.31%, system integration and technical services at 47.25%), but it has no pricing power over upstream and extremely high customer concentration downstream.

• Actual Procurement Content: The supplier types explicitly disclosed by the company are wafer fabs, packaging and testing plants, IP licensing vendors, EDA tool vendors; main procurement content is wafer and other raw materials, packaging and testing services. At the prospectus stage, DCU semi-finished products, HBM memory, IP licensing fees, equipment, and software licenses were separately listed (Source: 2022 Annual Report, Prospectus Hearing Draft)
• Upstream Concentration (Historical Series, Official Disclosure): Top five supplier procurement proportion was 81.41% in 2019, 67.83% in 2020, 78.41% in 2021 (prospectus); 78.95% in 2022 (top five procurement RMB 2.176 billion). The prospectus also disclosed extremely high concentration at the raw material level, with wafer + DCU semi-finished products + HBM top five accounting for 98.63% of raw material procurement in 2021
• Approximately 2025 top five procurement proportion of approximately 53%, largest supplier procurement of approximately RMB 1.46 billion, accounting for approximately 17% — ⚠ This figure appears only in a self-media article (Sohu account, 2026), not cross-verified in annual report originals/authoritative secondary sources, subject to the latest annual report
• Bargaining Power Assessment: The weaker party. The company's annual report risk disclosure states verbatim: "supplier concentration is relatively high... some suppliers' products are scarce and proprietary... the cost of switching to new suppliers is relatively high," and warns of entity list/geopolitical supply cutoff risks (the 2026 interim report retains the same language)
• Prepayment Evidence: RMB 4.771 billion at end-2026-06-30 (interim report disclosure), with the company stating "according to industry practice, advance orders must be placed with upstream suppliers and a certain proportion of advance payment made," i.e., using prepayments to lock capacity, a typical buyer-weakness signal
• 2025 Cost Side: Operating cost RMB 6.063 billion, up 82.40% YoY, significantly higher than revenue growth of 56.92%; of which direct material cost RMB 2.612 billion (+125.95%), packaging and testing cost RMB 1.233 billion (+45.20%); the company attributed this to upstream raw material and storage auxiliary material price increases, and foundry capacity tightness driving up packaging and testing processing fees
• Supply Chain Localization Statement: Hygon Education Industry General Manager Yu Zhe told Economic Observer in April 2026 that "Hygon's foundry, packaging, and high-bandwidth memory chips all come from domestic supply chains" — ⚠ Source is company representative oral account, not an announcement, cite with caution
• Technology Source Background: The company established two joint ventures with AMD, obtaining x86 processor design core technology licensing through cooperation; the prospectus discloses "AMD's subsidiary holds 15% equity in Company 3 (packaging and testing supplier)," which is key background for understanding the legitimacy boundary of its x86 route
• Customer Profile: Domestic leading server OEMs (named Inspur, Lenovo, H3C, Tongfang, etc. at the prospectus stage), with end industries being telecom operators, finance, internet, education, transportation, government affairs
• Customer Concentration (Official Disclosure, Year by Year): Top five customer revenue proportion was 99.12%/92.21%/91.23% in 2019/2020/2021; largest customer accounted for 40.26% in 2024; top five customers combined accounted for 90.28% in 2025, with the largest customer (related party) sales of RMB 8.149 billion, accounting for 56.68% of revenue (Source: Economic Observer 2026-04-15 citing 2025 Annual Report)
• ⚠ Verification Note on the Largest Customer: The company exempted disclosure of this customer's name on grounds of trade secrets; the market (Jiemian, Economic Observer, etc.) based on equity relationships, business background, and historical transaction cross-comparison speculates it to be Sugon and its controlled subsidiaries, but Hygon has not confirmed this in announcements, so it is market speculation and should not be regarded as official confirmation
• Industry Structural Bargaining Dynamics: Unlike automotive Tier-1 facing "annual price reductions," or consumer retail rebates, Hygon's situation is — downstream are leading server manufacturers much larger than itself (some are also shareholders/related parties), with a single customer accounting for over half and increasing 16 percentage points in one year; the company publicly defends this as "the server industry has relatively obvious head effects, with customers concentrated among a few major domestic server manufacturers," and emphasizes in investor interactions that "customer structure continues to optimize" and "major customers have relatively strong financial strength"
• Binding Effect Is Bidirectional: Sugon's 2025 net profit attributable to shareholders was RMB 2.176 billion, of which investment income from Hygon Information accounted for more than 30%; Hygon's revenue from Sugon accounted for nearly 60% (2025 basis)
• Accounts Receivable: RMB 4.03 billion at end-2025, up 77% YoY (higher than revenue growth of 56.9%), with the largest customer's accounts receivable proportion also exceeding 50% (end-2025 basis), falling back to RMB 3.833 billion at 2026-03-31. Quick calculation (non-official disclosure, for reference only): Using end-2025 accounts receivable of RMB 4.03 billion / 2025 revenue of RMB 14.377 billion as a rough estimate, accounts receivable is approximately equivalent to 28% of annual revenue, with turnover days on the order of approximately 100 days; 2024 corresponds to approximately RMB 2.28 billion / RMB 9.16 billion ≈ 25%, approximately 90 days (2024 revenue of RMB 9.162 billion is back-calculated from 2025 revenue and YoY +56.92%, not a directly disclosed figure). The trend direction is lengthening rather than shortening payment terms. Prepayments: approximately RMB 2.9 billion at end-2025 (+133%, this item only seen in self-media and secondary accounts), RMB 4.771 billion at end-2026-06-30 — cash before goods to upstream, goods before cash to downstream, both ends occupied. Cash flow side corroboration: 2026H1 net cash flow from operating activities was -RMB 428 million (down 119.64% YoY), versus +RMB 2.177 billion in the same period of 2025. In addition, multiple self-media mentions of contract liabilities plunging and inventory rising have not been directly verified with specific figures in official disclosures, recorded only as leads, not recommended for citation as fact.
• Supplier Concentration: Top five supplier procurement proportion was 81.41% in 2019, 67.83% in 2020, 78.41% in 2021 (prospectus, official disclosure), 78.95% in 2022 (top five procurement RMB 2.176 billion); approximately 2025 top five procurement proportion of approximately 53%, largest supplier approximately 17% — ⚠ This 2025 data has a single source (self-media article), not cross-verified, subject to the latest annual report. Customer Concentration: Top five customer revenue proportion was 99.12%/92.21%/91.23% in 2019/2020/2021 (prospectus); largest customer accounted for 40.26% in 2024; top five customers combined accounted for 90.28% in 2025, with the largest customer (market speculates Sugon and its controlled entities, company unconfirmed) sales of RMB 8.149 billion, accounting for 56.68% of revenue (Source: Economic Observer 2026-04-15 citing 2025 Annual Report).

Hygon Information sits in the "chip design (IP/architecture + ecosystem)" segment slightly left of center on the smile curve: not an upstream resource, nor a downstream brand OEM, but a Fabless design company — gross margin level (55%–64%) far higher than midstream manufacturing/OEM, but with no pricing power over upstream and extremely high customer concentration downstream, belonging to a "high gross margin, high squeeze" structure. Further improving profit margins truly depends not on price increases, but on three things: product structure upgrade brought by generational iteration (CPU No. 3/No. 4, DCU 8000 series volume ramp-up), easing of upstream price increases and packaging and testing fees, and scale effects diluting expenses; customer concentration and related party transaction proportion are reverse suppressors. Supplementary note: Internet comparison sites (such as caibaobang Rockchip/Hygon comparison table) label "61.19%" as 2025, but it is actually three-month data for 2025Q1, a basis mismatch, do not cite. 2026H1 main business basis gross margin was 55.21%, 2026Q1 gross margin was approximately 55.60%, cost-side pressure continues.

3. Financial Data and Valuation Analysis

3.1 Recent Operating Performance

2026H1 financial report disclosed on 2026-08-13: operating revenue RMB 9.099 billion (same period last year RMB 5.464 billion), net profit attributable to shareholders RMB 1.798 billion (same period last year RMB 1.201 billion), non-GAAP net profit attributable to shareholders RMB 1.631 billion (+49.67% YoY), basic earnings per share RMB 0.78 (+50.00% YoY), weighted average ROE 7.56% (same period last year 5.75%), gross margin 55.21% (down significantly from approximately 60% in the same period last year), R&D investment as a proportion of operating revenue 29.15% (same period last year 31.31%), net cash flow from operating activities -RMB 428 million (down 119.64% YoY, company explains as increased inventory reserves and higher raw material procurement expenditures); total assets RMB 36.034 billion (+1.11% from end of last year), net assets attributable to shareholders RMB 25.373 billion (+12.80% from end of last year). 2026Q2 QoQ data: revenue +25.58% QoQ, net profit attributable to shareholders +61.75% QoQ, non-GAAP RMB 1.035 billion (+59.69% YoY). 2026Q1 net profit attributable to shareholders growth (+35.82%) was significantly lower than revenue growth (+68.06%), CITIC Securities noted that excluding share-based payment, Q1 net profit attributable to shareholders growth reached +74.86%; non-GAAP RMB 597 million (+34.99% YoY). 2024 data comes from audited annual report (Note: 2024 earnings flash basis net profit attributable to shareholders RMB 1.929 billion/+52.73%, slightly different from annual report final value of RMB 1.931 billion, a normal minor adjustment from flash to annual report); 2024 non-GAAP RMB 1.816 billion (+59.8%), EPS RMB 0.83, gross margin 63.72%, net operating cash flow RMB 977 million (+20.08%). 2025H1 data comes from Guotai Haitong research report (2025-09-09), gross margin 60.1%. 2025 full-year official annual report figures not directly found: operating revenue approximately RMB 14.36–14.38 billion (East Money main business composition page shows 2025-12-31 high-end processor revenue RMB 14.36 billion, CITIC Securities back-calculates 2026E revenue of RMB 22.277 billion corresponding to 2025 base of RMB 14.377 billion, the two are consistent); net profit attributable to shareholders approximately RMB 2.5–2.8 billion (uncertain, needs verification with official annual report).

The latest financial report is the 2026 interim report (disclosed 2026-08-13), with revenue and profit continuing high growth: 2026H1 revenue RMB 9.099 billion, up 66.52% YoY, net profit attributable to shareholders RMB 1.798 billion, up 49.69% YoY, performance in line with previous guidance (multiple brokerages commented as "in line with expectations" or "in line with previous guidance"). Structurally, it exhibits "high revenue growth, profit/gross margin under pressure": 2026H1 gross margin 55.21%, down significantly from approximately 60% in the same period last year, mainly affected by product/cost structure; Q1 net profit attributable to shareholders growth (+35.82%) was significantly lower than revenue growth (+68.06%), CITIC Securities noted that excluding share-based payment, Q1 net profit attributable to shareholders growth reached +74.86%. By quarter, 2026Q2 revenue RMB 5.065 billion (+65.32% YoY, +25.58% QoQ), net profit attributable to shareholders RMB 1.111 billion (+59.78% YoY, +61.75% QoQ), accelerating QoQ. Net cash flow from operating activities was -RMB 428 million, down 119.64% YoY, which the company explained as increased inventory reserves and higher raw material procurement expenditures; institutions interpreted this as active stockpiling to support accelerated H2 delivery. R&D investment as a proportion of operating revenue was 29.15% (same period last year 31.31%). 2025 full-year official annual report figures not directly found, revenue of approximately RMB 14.36–14.38 billion is cross-back-calculated, net profit attributable to shareholders of approximately RMB 2.5–2.8 billion has two sets of inconsistent data, marked as pending verification.

3.2 Profit Forecast

3.3 Valuation Level and Institutional Ratings

4. Recent News and Announcements

4.1 Hygon Information (688041) Recent Announcements Overview: Multiple Proposals Disclosed in a Concentrated Manner at the 25th Meeting of the Second Board of Directors on September 11, 2026

As of the search time point of approximately mid-September 2026 (latest announcement date is 2026-09-12). Hygon Information held the 25th meeting of the second board of directors on September 11, 2026, approving multiple proposals at once, and disclosed them in a concentrated manner on September 12, 2026, with relevant proposals planned to be submitted to the 2026 Second Extraordinary General Meeting for deliberation. Proposals involved include: amending the "Articles of Association" and handling industrial and commercial registration changes, amending the "Related Party Transaction Management System" (Announcement No. 2026-020); canceling some repurchased shares and reducing registered capital (Announcement No. 2026-021); using remaining over-raised funds to permanently supplement working capital (Announcement No. 2026-022); board election (Announcement No. 2026-023); convening the 2026 Second Extraordinary General Meeting (Announcement No. 2026-024).

4.2 Plan to Cancel 520,125 Repurchased Shares and Reduce Registered Capital (Announcement No. 2026-021)

Hygon Information plans to cancel 520,125 shares in the repurchase special securities account, accounting for 0.02% of total share capital. These shares were repurchased under board approval on August 25, 2023, and completed on November 1, 2023, with cumulative repurchase of 520,125 shares, at a maximum transaction price of RMB 65.93/share and minimum price of RMB 55.00/share, with cumulative payment of approximately RMB 30,009,676.04 (excluding taxes and fees). The reason for cancellation is that repurchased shares used for employee stock ownership or equity incentives should be transferred or canceled within 3 years after disclosure of repurchase results; because the 3-year period expired before being used for employee stock ownership or equity incentives, they are to be canceled. After cancellation, total share capital decreases from 2,324,338,091 shares to 2,323,817,966 shares; registered capital decreases from RMB 2,324,338,091 to RMB 2,323,817,966. The remaining shares in the repurchase special account decrease from 4,725,316 shares to 4,205,191 shares. This proposal still requires shareholder meeting deliberation.

4.3 Plan to Use Remaining Over-Raised Funds of RMB 329.9684 Million to Permanently Supplement Working Capital (Announcement No. 2026-022)

Hygon Information plans to use a total of RMB 329.9684 million (approximately RMB 330 million) to permanently supplement working capital, of which remaining over-raised funds are RMB 287.271 million, plus net interest of RMB 42.6974 million during the over-raised funds deposit period, accounting for 23% of total over-raised funds. The company's IPO (2022) issued 300 million shares at an issue price of RMB 36, raising a total of RMB 10.8 billion, net approximately RMB 10.583 billion, with over-raised funds of approximately RMB 1.435 billion. Previously, multiple rounds of working capital supplementation: approximately RMB 430 million in 2022, approximately RMB 430 million in 2024, approximately RMB 287 million in September 2025. After this completion, all IPO fundraising will have been fully utilized. The company commits that cumulative over-raised working capital supplementation in any 12-month period will not exceed 30% of total over-raised funds; and no high-risk investments will be made within 12 months after completion.

4.4 Amendment of "Articles of Association" and Handling Industrial and Commercial Registration Changes, Amendment of "Related Party Transaction Management System" (Announcement No. 2026-020)

Due to capital reduction from cancellation of repurchased shares, etc., the registered capital in Hygon Information's "Articles of Association" changes from RMB 2,324,338,091 to RMB 2,323,817,966; additionally, compliance amendments were made to provisions on directors' loyalty and diligence obligations and cumulative voting system in accordance with the new "Company Law." This proposal takes effect after shareholder meeting approval.

4.5 Board Election: Nomination of 6 Non-Independent Directors and 4 Independent Directors for the Third Board of Directors (Announcement No. 2026-023)

Hygon Information's second board of directors term is about to expire, and candidates for the third board of directors are nominated: 6 non-independent director candidates, being Li Jun, Sha Chaoqun, Xu Wenchao, Lan Xinguang, He Xingyu, Yang Tian; 4 independent director candidates, being Huang Hua, Qin Wei, Wang Yu, Zhang Wenbo (Zhang Wenbo is an accounting professional). Together with 1 employee representative director elected by the employees' congress, they will form the third board of directors for a 3-year term. Li Jun (currently Chairman and General Manager of Dawning Information Industry Co., Ltd.) remains a director candidate, indicating that personnel ties with Sugon continue.

4.6 Convening of the 2026 Second Extraordinary General Meeting (Announcement No. 2026-024)

Hygon Information has scheduled the 2026 Second Extraordinary General Meeting for 14:00 on September 28, 2026, at Building C, No. 27, Zhongguancun Software Park, Haidian District, Beijing; the record date is September 18, 2026. Proposals to be deliberated include: ① Amending the "Articles of Association" and handling industrial and commercial registration changes; ② Amending the "Related Party Transaction Management System"; ③ Canceling some repurchased shares and reducing registered capital; ④ Using remaining over-raised funds to permanently supplement working capital; ⑤, ⑥ Board election (election of 6 non-independent directors and 4 independent directors for the third board, cumulative voting). Among these, proposals 1 and 3 are special resolution proposals; proposals 4, 5, and 6 are counted separately for minority investors.

4.7 2026 Interim Results: Revenue RMB 9.099 Billion, Up 66.52% YoY; Net Profit Attributable to Shareholders RMB 1.798 Billion, Up 49.69% YoY

Hygon Information's 2026 interim report was disclosed on August 13, 2026. During the reporting period, operating revenue was RMB 9.099 billion, up 66.52% YoY; net profit attributable to shareholders was RMB 1.798 billion, up 49.69% YoY; non-GAAP net profit attributable to shareholders was RMB 1.631 billion, up 49.67% YoY. 2026Q2 single-quarter revenue was RMB 5.065 billion (+65.32% YoY, +25.6% QoQ), net profit attributable to shareholders RMB 1.111 billion (+59.78% YoY, approximately +61.7% QoQ), with single-quarter revenue and profit hitting record highs. Gross margin was 55.21%, down 4.94pct YoY, affected by product mix changes and upstream raw material and storage auxiliary material price increases. R&D investment was RMB 2.652 billion, up 55.05% YoY, accounting for 29.15% of revenue; R&D personnel numbered 3,007, accounting for 80.83% of employees. Net operating cash flow was -RMB 428 million (same period last year +RMB 2.177 billion), mainly due to strategic stockpiling; period-end inventory RMB 7.518 billion, prepayments RMB 4.771 billion (historical high), contract liabilities decreased from RMB 2.019 billion at the beginning of the year to RMB 19 million. Share-based payment impact in the first half was approximately RMB 472 million; excluding share-based payment, net profit was RMB 2.270 billion, up 82.30% YoY. The board proposal on August 14, 2026 shows no distribution or capitalization for the interim report.

4.8 2025 Annual and Interim Dividend and Shareholder Return

2025 annual profit distribution (Announcement 2026-008): cash dividend of RMB 1.5 per 10 shares (tax included, no bonus shares, no capitalization), announced on June 16, 2026, with record date June 22, 2026, ex-dividend and payment date June 23, 2026; actual distributable shares of approximately 2.3196 billion basis, corresponding to proposed cash distribution of approximately RMB 348 million (Note: two bases appeared in search results, with risk of text truncation or basis mixing, recommend verifying with original announcement before citing). 2025 interim dividend: RMB 0.9 per 10 shares, announced on January 23, 2026, implemented on January 29, 2026, totaling approximately RMB 209 million. 2025 annual cash dividend totaled approximately RMB 556.7 million, accounting for 21.88% of that year's net profit attributable to shareholders (RMB 2.545 billion).

4.9 Major Asset Restructuring: Absorption Merger of Sugon — Terminated (Background Event)

On May 25, 2025, Hygon Information and Sugon (603019) signed an absorption merger letter of intent, with a share exchange ratio of 1 Sugon share for 0.55 Hygon shares, valued at approximately RMB 110 billion; with supporting fundraising. Sugon suspended trading from May 26, 2025; on June 10, 2025, Hygon Information disclosed the restructuring plan and resumed trading. On December 9, 2025, the transaction was terminated: Sugon's 26th meeting of the fifth board of directors approved termination of the share exchange absorption merger; Hygon Information canceled the acquisition. Market reports treated the termination as a major event. On December 10, 2025, Hygon Information issued the "Announcement on Convening the Investor Briefing on Terminating Major Asset Restructuring." This restructuring matter has been terminated, and September 2026 personnel information shows Sugon-related connections continue. If the report only covers 2026, this item can be treated as background.

4.10 Equity Incentives, Shareholder Equity Changes, Restricted Share Unlocking, and Institutional Research Updates

2025 Restricted Stock Incentive Plan: On September 10, 2025, disclosed draft and summary, assessment management measures, independent financial advisor report, etc.; approved by extraordinary general meeting on September 25, 2025 (on September 26, 2025, disclosed insider self-inspection report and legal opinion). Related expenses or share-based payment impact mentioned in the September 2026 election proposals have been reflected in the interim report (approximately RMB 472 million). Shareholder equity changes: On August 12, 2025, "Announcement on Tips on Shareholder Equity Changes" and simplified equity change report; on June 10, 2025, there was also a shareholder equity change tip announcement (specific changing entities and proportions not obtained in this search, data missing). Restricted share unlocking: On August 5, 2025, "Announcement on the Listing and Circulation of Some Restricted Shares from the Initial Public Offering." Changes in senior management and core technical personnel: announced on August 6, 2025. Institutional research: On August 18, 2026, received research from 20 institutions (on August 20, 2026, released the "Investor Relations Activity Record Form"), with institution types including insurance, funds, and brokerages; management emphasized maintaining high-intensity R&D investment, with focus on new-generation CPU, DCU, HSL interconnect protocol upgrades, DTK software stack, etc. Trading anomalies: Sohu's "Major Events Memorandum" lists 2025 September 11 "securities with gains reaching 15%" trading public information (Note: this item is 2025, not 2026).

4.11 Policy and Industry News: Domestic Computing Ecosystem Adaptation and CPU Incremental Logic

On August 3, 2026, MiniMax H3 model was open-sourced, and Hygon Information, along with Huawei Ascend, Moore Threads (688795), MetaX (688802), Kunlun Chip, Tianshu Zhixin, Biren Technology, etc., were listed as adaptation or participating parties. The "15th Five-Year Plan" domestic computing strategy, and CPU:GPU ratio changes brought by AI Agents (from 1:8 approaching 1:1) are viewed by multiple research reports and management as the company's CPU incremental logic.

4.12 Uncertainties and Data Gaps to Note

1) Search time point and year confirmation: Multiple result dates fall in 2026 (such as 2026-09-12, 2026-08-14), inferring the current time is approximately mid-September 2026; if the actual time point differs, please refer to exchange originals. All announcement numbers and dates in the text are transcribed as-is from sources. 2) Primary source limitations: Unable to directly open SSE PDF originals for item-by-item verification (mostly reproduced from China Fortune Network, Securities Star, Sina, East Money, etc.). Key figures (520,125 shares, RMB 329.9684 million, RMB 9.099 billion, etc.) each have at least 2 independent sources in agreement, with relatively high credibility; but final registered capital and share capital figures are subject to China Securities Depository and Clearing issuance and industrial and commercial approval. 3) The "distributable shares and proposed total cash distribution" for 2025 annual profit distribution appeared in two bases in search results (approximately 2.3196 billion shares corresponding to approximately RMB 348 million), with risk of text truncation or basis mixing, recommend verifying with original announcement before citing. 4) Specific details of shareholder equity changes including specific reduction or increase entities and proportions, restricted share unlocking scale, 2025 equity incentive grant price and quantity, etc., were not obtained in this search with cross-verifiable specific figures, not cited, need supplementary verification. 5) Stock price, market cap, and technical aspects (main force capital, PE, etc.) are not within the scope of this task, not verified; target prices given by research reports (such as Huatai RMB 337, Huachuang RMB 363) are single brokerage opinions, not company disclosed data. 6) The major asset restructuring termination is a December 2025 event, beyond the "current month or quarter" window, listed as background; if the report only covers 2026, it can be deleted.

5. Stock Price Trend and Technical Analysis

5.1 Price Overview

5.2 Technical Indicators

As of the 2026-09-11 close, Hygon Information traded at RMB 230.89, down 0.64%, with the decline smaller than the semiconductor sector (approximately -2%). The price declined for eight consecutive trading days from RMB 247.21 on 9-02 to RMB 230.89, with significant cumulative decline but no gap-down sharp drops. Technicals show a weak pattern: closing price below all of MA5 (235.73), MA10 (242.01), MA20 (246.33) in bearish alignment; MACD golden cross below zero axis with weak red bar; RSI death cross on September 4 then crossing below 50. On chips, profit ratio is only 12.78%, with approximately 87% of chips at a loss, and the 70% cost range of RMB 236.26~340.42 above the current price, with rebounds facing continuous unwinding selling pressure. On capital, main force net outflow for 5 consecutive trading days totaling approximately RMB 1.21 billion, but hot money continues net inflow to offset, with 9-11 closing order ratio of approximately 86% showing there is still absorption around RMB 230. Margin balance RMB 8.642 billion, accounting for 1.60% of free-float market cap, below market average, but absolute scale is large. As a RMB 536.7 billion market cap, fully circulating, SSE 180 constituent stock, liquidity is extremely ample with low bid-ask slippage risk; the main constraint on elasticity is not liquidity but above-market trapped chip supply. Overall assessment is weak consolidation but no breakdown accelerating decline. Note: RSI6 specific value, KDJ value, Bollinger band upper/lower specific values all not obtained from reliable sources; 52-week low has multi-source discrepancy of RMB 173~196; main force capital statistics are inconsistent in basis and values among Securities Star, East Money, Jiufang Zhitou, and Securities Times DataBao, for directional confirmation only.

5.3 Short-Term Outlook (Next Week, Scenario Analysis, for Reference Only)

⚠️ Risk Warning: The following content is only subjective scenario analysis based on historical prices, technical indicators, and capital data, does not constitute investment advice, and does not represent predictions or guarantees of future trends.

① Key Technical Levels

② Next Week Scenarios (Subjective Weights, Not Statistical Probabilities)

• Consolidation (Base Scenario) (relatively highest weight, approximately 50% (subjective heuristic weight, based on subjective judgment of current technical and capital structure, not statistical probability)): Price moves sideways in the RMB 228~242 range, repeatedly contesting MA5 235.73. Trigger/maintenance conditions: turnover maintains RMB 4.0~4.5 billion level without volume expansion; semiconductor sector fluctuates narrowly; main force single-day net outflow narrows to RMB 100~200 million, hot money continues to offset. Current state is MA bearish alignment + MACD red bar below zero axis + RSI death cross on 9-04 then crossing below 50 + main force net outflow for 5 consecutive days, a weak consolidation but not breakdown accelerating decline; 9-11 stock decline (-0.64%) smaller than sector (approximately -2%) and closing order ratio of approximately 86%, showing there is still absorption around RMB 230, hence this as the base scenario.
• Weaker Downside (medium weight, approximately 30% (subjective heuristic weight, not statistical probability)): Loses RMB 225, probes strong support zone of RMB 211~215. Trigger conditions: main force single-day net outflow again exceeds RMB 300 million (such as 9-07, 9-08 levels); semiconductor sector single-day decline exceeds 2%; margin balance falls below RMB 8.4 billion accelerating deleveraging. If effectively broken (closing price below RMB 225 for 2 consecutive days), opens downside space toward strong support of RMB 211~215; if strong support is broken, reference 52-week low area around RMB 196.
• Rebound Strengthening (lower weight, approximately 20% (subjective heuristic weight, not statistical probability)): Recovers RMB 235 and stands above RMB 242, approaching MA20 at RMB 246. Trigger conditions need to be simultaneously met: single-day turnover expands to above RMB 5.5 billion (approximately 30% expansion from current RMB 4.3 billion) + semiconductor sector turns strong + news catalysts (absorption merger of Sugon RMB 115.967 billion transaction progress, domestic computing/Xinchuang policy, DCU large model adaptation order landing, etc.). Above, RMB 236.26~340.42 is the 70% chip cost dense zone, with each step up in rebound facing unwinding selling pressure.

③ Capital and Liquidity Background

Turnover rate: 9-11 was 0.82% (9-08 was 0.77%); recent daily turnover approximately RMB 4.3 billion (9-08 was RMB 4.303 billion, 9-11 was RMB 4.337 billion). 5-day average volume 180,400 lots vs 10-day average volume 161,700 lots (Jiufang, 2026-09-11), volume mildly expanding but price declining, a volume-expansion bearish decline, a relatively negative volume-price combination. Shareholder concentration: top ten shareholders combined approximately 67.9%, but only 1 passive ETF among public funds (China AMC SSE STAR 50 ETF, 0.64%) and reducing, with dominant parties being state-owned/industrial capital and employee stock ownership platform (the latter already reduced approximately RMB 2.7 billion through block trades in April 2026, average price range RMB 218.22~248.30, holding decreased from 6.09% to 5.59%). Shareholder data as of 2026-06-30 (SSE top ten shareholders page marked data date 2026-08-14), lagged approximately 2.5 months, structure may have changed during the period. Leverage background: margin balance RMB 8.642 billion, accounting for 1.60% of free-float market cap (below market average 3.95%), margin traders outflow for 8 of last 10 days, cumulative net selling RMB 285 million; leverage level not extreme, deleveraging downside pressure relatively controllable, but absolute margin balance is large, liquidation orders would amplify volatility during oversold conditions. Practical implications: As a RMB 536.7 billion market cap, fully circulating, SSE 180 constituent stock, order book depth is sufficient, slippage on single transactions of millions is minimal, no small-cap liquidity discount issue; what truly constrains elasticity is not liquidity, but the above supply formed by 90% of chips trapped in the RMB 214.90~356.45 range.

Using the recent 10-trading-day average volume of 161,700 lots / daily average turnover of approximately RMB 4.3 billion as baseline — if single-day turnover continuously (2+ consecutive days) expands to above RMB 5.5 billion, and the stock price simultaneously stands above RMB 235, it can be viewed as a signal of incremental capital entry; conversely, if turnover shrinks to below RMB 3.5 billion and the stock price falls below RMB 225, it is viewed as insufficient absorption, with increased probability of the weaker downside scenario.

④ Points to Watch (Observation Ideas Only, Not Trading Instructions)

• Watch whether MA5 235.73 and MA10 242.01 can be recovered within 1~2 trading days after being broken; if not recovered, short-term moving average pressure continues to apply (observation idea, not trading instruction).
• Watch whether RMB 225.37 (9-11 intraday low) / RMB 228.17 (East Money 9-11 main force cost) can be held; effective breakdown (closing price below RMB 225 for 2 consecutive days) opens downside space toward strong support of RMB 211~215; if strong support is broken, reference 52-week low area around RMB 196 (observation idea, not trading instruction).
• Watch whether main force capital net outflow further expands for 5+ consecutive days (9-07 to 9-11 already consecutive outflow of approximately RMB 1.1~1.2 billion); if single-day net outflow converges to within RMB 100 million, and hot money continues net inflow, the consolidation scenario is more likely to continue (observation idea, not trading instruction).
• Watch turnover and volume-price divergence: expansion to above RMB 5.5 billion combined with different combinations of RMB 235 being lost/recovered corresponds to the divergence point between rebound strengthening and weaker downside; if the current volume-expansion bearish decline turns to volume-shrinking stabilization (turnover drops below RMB 3.5 billion while price no longer makes new lows), it is a precondition observation signal for short-term stabilization (observation idea, not trading instruction).

The above scenario analysis is based on 2026-09-11 closing data and historical price, technical indicator calculations; short-term stock prices will also be affected by multiple factors including news, capital flows, and overall market environment. Technical indicators themselves have lag and limitations, do not constitute guarantees of actual future trends, and do not constitute buy or sell recommendations. Please combine with the latest market information for independent judgment and bear investment risks yourself. Supplementary data gaps and uncertainty statement: ① RSI6 specific value, KDJ value, Bollinger band upper/lower specific values all not obtained from reliable sources; this report only uses the definitive relationship of MA20 ≈ BOLL middle band = RMB 246.33 and volatility rough calculation as substitute, rough calculation values are clearly marked; ② 52-week low has discrepancy of RMB 173~196, various sources listed in the main text; ③ Main force capital statistics are inconsistent in basis and values among Securities Star, East Money, Jiufang Zhitou, and Securities Times DataBao (9-07 had two versions of RMB 328 million and RMB 370 million on the same day), for directional confirmation only; ④ East Money capital flow page timestamp is 2026-09-08, its 10-day main force +RMB 675 million is not contradictory with the large outflow in the recent 5 days.

6. Industry Landscape and Competitor Analysis

6.1 Industry Status

The industry attribute is integrated circuit design, a capital/technology/talent triple-intensive industry. The company describes itself as in a "systematic race" stage, driven by both AI computing demand explosion + autonomous controllability policy. Demand-side third-party data (all media reproductions, not directly verified against original reports): IDC data shows China's accelerated server market grew 134% YoY in 2024, with a scale of USD 22.1 billion, expected to exceed USD 140 billion by 2029; China Academy of Information and Communications Technology / China Insights Consultancy data shows mainland China computing scale CAGR of approximately 49.7% from 2024–2029 (Source: Economic Observer 2026-04-15 reproduction).

6.2 Competitive Landscape

• Technology Route Competitive Landscape (Domestic CPU/Accelerator Cards): Hygon is x86 architecture CPU + "CUDA-like" GPGPU DCU (the only domestic x86 permanent licensing path + CUDA-like ecosystem)
• Huawei: Kunpeng (ARM, CPU) + Ascend (Da Vinci architecture NPU), self-built ecosystem (CANN/MindSpore)
• Zhaoxin: x86 (from VIA licensing)
• Loongson Technology (688047): autonomous LoongArch instruction set
• Phytium (China Electronics system, ARM, unlisted); Sunway (Alpha derivative)
• Cambricon (688256), Jingjia Micro (300474): another branch of AI acceleration/GPU route
• ⚠ The statement that "the first tier of domestic CPUs is Huawei + Hygon, with Xinchuang procurement share above 60%" appears only in self-media analysis articles (East Money Caifuhao), without authoritative institutional source corroboration, marked as unverified
• Key Upstream and Downstream Dynamics: Bargaining pressure in this industry mainly comes from upstream rather than downstream annual price reduction clauses — advanced process capacity is prioritized by Apple/NVIDIA/AMD, etc., and domestic design companies can only lock capacity through prepayments + long-term orders. The gross margin decline in 2025–2026 is precisely the financial manifestation of this mechanism

6.3 Major Competitors

Due to search limitations, comparable financial data for each company could not be verified individually; this comparison is qualitative analysis rather than financial comparison, which is an obvious data gap this time. On the ecosystem compatibility and migration cost dimension, Hygon (x86+CUDA-like) is optimal; on the instruction set autonomy dimension, Loongson is strongest but has the highest ecosystem migration cost; on the system-level integration and own customer scale dimension, Huawei is strongest, constituting the most direct competition to Hygon; on the AI acceleration specialized dimension, Cambricon and Hygon DCU compete head-on in intelligent computing scenarios. Sugon and Hygon are upstream-downstream binding relationship within the same system rather than competitive relationship; Sugon is both the largest shareholder and the largest customer and downstream OEM receiver.

7. Risk Warnings

• Large Customer Concentration and Related Party Transaction Risk: 2025 largest customer (company exempted name disclosure on grounds of trade secrets, market based on equity relationships, business background, and historical transaction cross-comparison speculates it to be Sugon and its controlled subsidiaries, company has not confirmed in announcements) sales of RMB 8.149 billion, accounting for 56.68% of revenue, up more than 16 percentage points in one year from 40.26% in 2024; 2025 top five customers combined accounted for 90.28% of revenue. The company was also asked in investor interactions "how to ensure business independence after the absorption merger matter has been terminated"; customer structure changes will directly affect revenue stability and related party transaction pricing fairness.
• Upstream Supply Chain Dependence and Supply Cutoff Risk: The company is Fabless model, with wafer processing, packaging and testing all outsourced; the prospectus discloses that wafer + DCU semi-finished products + HBM top five combined accounted for 98.63% of raw material procurement in 2021, top five supplier procurement accounted for 78.41% (78.95% in 2022). The annual report explicitly warns that "some suppliers' products are scarce and proprietary... the cost of switching to new suppliers is relatively high" and entity list/geopolitical supply cutoff risks (the 2026 interim report retains the same language). Prepayments at end-2026-06-30 reached RMB 4.771 billion, with the company stating "according to industry practice, advance orders must be placed with upstream suppliers and a certain proportion of advance payment made," a buyer-weakness signal.
• Continuous Gross Margin Decline Risk: 2025 gross margin 57.78%, down 5.92pct YoY (63.72% in 2024), further declining to 55.21% in 2026H1 (down significantly from approximately 60% in the same period last year); 2025 operating cost up 82.40% YoY, significantly higher than revenue growth of 56.92%, of which direct material cost RMB 2.612 billion (+125.95%), packaging and testing cost RMB 1.233 billion (+45.20%). The company's response basis is upstream raw material (including storage auxiliary materials/HBM) price increases, foundry capacity tightness driving up packaging and testing processing fees, and structural impact of increased DCU proportion. If cost-side pressure continues, profit growth will continue to be lower than revenue growth (2026Q1 net profit attributable to shareholders +35.82% vs revenue +68.06% is the manifestation).
• Operating Cash Flow and Working Capital Occupation Risk: 2026H1 net cash flow from operating activities was -RMB 428 million, down 119.64% YoY (+RMB 2.177 billion in the same period last year), which the company explained as increased inventory reserves and higher raw material procurement expenditures; at end-2026-06-30, inventory was RMB 7.518 billion, prepayments RMB 4.771 billion (historical high), contract liabilities decreased from RMB 2.019 billion at the beginning of the year to RMB 19 million. Meanwhile, end-2025 accounts receivable were RMB 4.03 billion, up 77% YoY, higher than revenue growth of 56.9%, with the largest customer's accounts receivable proportion also exceeding 50%, exhibiting a "cash before goods to upstream, goods before cash to downstream" pattern of being occupied at both ends; mismatch in collection and stockpiling pace may exacerbate cash flow volatility.
• Technology Route Licensing Source and Personnel Ties Governance Risk: The company's x86 processor design core technology comes from licensing cooperation when establishing two joint ventures with AMD (prospectus discloses AMD's subsidiary holds 15% equity in one of the company's packaging and testing suppliers); in the September 2025 election proposals, Li Jun (currently Chairman and General Manager of Dawning Information Industry Co., Ltd.) remains a non-independent director candidate; after the December 2025 terminated absorption merger of