Preface

Throughout history, investment patterns have shown recurring themes and tendencies. The recent alignment of Cambrian's stock growth on the Sci-Tech Innovation Board with the favorable reception from mutual funds mirrors past trends seen with stocks like Kweichow Moutai. Cambrian has emerged as a catalyst, pushing its stock price and market value to unprecedented heights, positioning itself among the leaders in its sector. As technology advancement echoes consumption upgrades from the past, young fund managers today have elevated their standings on account of Cambrian's remarkable growth, paralleling the career boosts that were seen amid economic shifts throughout investment history.

Lazy bag

The key takeaway is that Cambrian's stock value has surged over 10 times, capturing the interest of fund managers and investors alike. The valuation, despite performance questions, highlights the shifts in investment paradigms, focusing on potential industry trajectories more than immediate fiscal data.

Main Body

The evolving investment landscape frequently repeats itself as certain themes emerge throughout history. Cambrian's impactful rise on the A-share market has captured attention due to its rapid stock price increase and its alignment with mutual fund preferences, similar to the historic affection between funds and companies such as Kweichow Moutai. As of early 2025, Cambrian's market valuation has soared beyond 300 billion yuan, placing it firmly among the giants of the Sci-Tech Innovation Board, only trailing leaders like SMIC and Haiguang Information.

This significant ascent has occurred despite a modest fundamental performance. Through the first three quarters of 2024, Cambrian's revenue was 185 million yuan with a reduced net loss of 725 million yuan year on year. Yet, the market's imagination has lifted its share price, benefiting funds and investors substantially. Mutual funds continue to flock to Cambrian, suggesting that its growth narrative may have more chapters ahead.

The premium commanded by Cambrian parallels a broader trend in the artificial intelligence (AI) sector. Following impressive breakthroughs in generative AI technologies, competitive investments in computing power have accelerated, sparking heightened demand for chips and networking equipment. This dynamic, reminiscent of past technology booms, reflects fundamental societal shifts, akin to the “Internet Plus” surge of 2015. Although current earnings may lag behind expectations, future market potential and thematic significance bolster investor optimism.

Despite traditionally stringent stock selection criteria, fund managers have shown exceptional interest in Cambrian, underscoring a departure from conventional aesthetics towards greater emphasis on potential and future industry impact. This pivots investment focus from immediate financial metrics towards assessing strategic market spaces, technological innovation, and long-term growth capabilities.

Addressing Cambrian's valuation requires accepting high price volatility due to its early-stage growth status and broader industry lifecycle considerations. Methods for appraising such technology-centric firms diverge notably from those of traditional sectors, emphasizing potential breakthroughs and future performance.

Cambrian's ascent offers profound insights for future investments, illustrating the shift in valuation philosophies favoring potential over present metrics. AI companies with strategic positioning may continue to enjoy market confidence notwithstanding formidable challenges. Investing prudently in technology stocks involves recognizing trends, embracing potential industry paths, and maintaining a nuanced understanding of valuation dynamics conditioned by technological advancements.

Key Insights Table