On October 28, Shanghai Fudan Microelectronics Group Co., Ltd. (01385) released its results for the first three quarters of 2026.
In the first three quarters, the company achieved revenue of 3.564 billion yuan, up 17.84% year on year; net profit attributable to shareholders was 1.06 billion yuan, up 221.08% year on year; basic earnings per share were 1.29 yuan.
Placed side by side, the most striking figure is not Shanghai Fudan's total net profit of 1.06 billion yuan, but the huge gap between the 221.08% profit growth rate and the 17.84% revenue growth rate. Profit is growing more than ten times faster than revenue. Where did the money come from? Was it a one-off accounting reversal, or has a change in business structure begun to become visible?
Product Mix Optimization Further Unleashes Profit Elasticity
A closer look at Shanghai Fudan's financial report shows that the value of this third-quarter report does not lie in the figure "221.08%" itself, but in the fact that it verified one thing: after inventory was cleared in 2025, Shanghai Fudan's profit model is shifting from being dragged down by inventory write-downs to being driven by product mix optimization.
According to the financial report, after excluding non-recurring gains and losses, Shanghai Fudan's net profit attributable to shareholders for the first three quarters still rose 153.83% year on year, indicating that the profitability of the main business has undergone a fundamental and trend-based improvement. This is not only the result of recovering demand, but also a comprehensive reflection of the company's across-the-board improvement in product competitiveness, cost control capability, and operational efficiency.
At the same time, the increase in its gross margin is also direct proof of the leap in the company's earnings quality. In the first three quarters, the company's overall gross margin rose from 58.47% to 59.34%, and the gross margin for the third quarter alone reached 63.26%, reflecting the results of a higher proportion of high-margin products and the optimization of the product mix.
From the perspective of business structure and inventory management, the explosive recovery on Shanghai Fudan's profit side is mainly related to these two major internal changes.
In terms of business structure, during the reporting period, the company's product mix continued to move upscale, and the share of high-gross-margin categories rose steadily. The company continued to phase out low-value-added conventional products and concentrated resources on high-barrier categories such as high-end programmable logic chips, automotive-grade chips, and intelligent computing power chips, driving the overall gross margin upward and continuously opening up profit space.
According to the financial report, in the first three quarters, the company's FPGA and other product lines contributed revenue of 1.196 billion yuan, making it the company's largest source of revenue and core growth engine. This product line directly benefits from explosive demand in downstream high-growth fields such as artificial intelligence, high-performance computing, and communication base stations (5G-A).
The "Fuwei Qinglong" JFMQL30TAI676H launched by the company adopts a CPU+FPGA+AI multi-core heterogeneous fusion architecture and targets high-throughput, low-latency scenarios such as image and video, wireless communications, and data analysis, promoting the upgrade of products from traditional FPGA to heterogeneous intelligent computing power platforms. At the same time, the company launched the Agent intelligent FPGA development platform, covering code generation, simulation verification, and deployment delivery, further improving the development ecosystem.
Non-volatile memory (revenue of 1.092 billion yuan) and security and identification chips (revenue of 726 million yuan) constitute the company's stable cash flow and business foundation. Smart meter chips (revenue of 430 million yuan) and integrated circuit testing services (revenue of 120 million yuan) reflect the company's deep cultivation in segmented markets and its ability to vertically integrate the industry chain, providing stable support for overall performance.
In terms of inventory management, in the first three quarters, Shanghai Fudan's refined inventory management results became prominent, allowing it to shed historical operating burdens. In past industry downturns, chip companies generally faced inventory impairment pressure, which eroded corporate profits. In 2025, the company's profit was suppressed by inventory write-down losses, and in 2026 this factor reversed, becoming an important source of profit elasticity. During the period, the company actively optimized its inventory structure and strictly controlled inventory risk, and inventory write-down losses fell sharply year on year, greatly reducing non-operating profit losses and fully releasing profit elasticity.
From the above, it can be seen that for Shanghai Fudan, the third-quarter report is not a numerical rebound from a low base, but a confirmation slip showing that the product structure has begun to speak after inventory was cleared.
Recovering Industry Sentiment as the Foundation, Domestic Substitution and Emerging Scenarios as the Wings
Of course, the profit elasticity in Shanghai Fudan's third-quarter report cannot be separated from the support of the industry backdrop. In 2026, the domestic semiconductor industry welcomed a structural turning point, with recovering end demand combined with self-controllable policy drivers keeping industry sentiment on an upward trend.
On the one hand, domestic substitution of high-end FPGA chips has entered an acceleration phase. For a long time, the domestic high-end programmable logic chip market was monopolized by overseas oligopolies, with a low localization rate and broad room for independent substitution. Under the broader trend of domestic computing power localization and independent control of core chips, downstream government and enterprise, industrial, and computing power customers are accelerating the introduction of local supply chains. As a domestic FPGA leader, the company continues to seize overseas substitution share with a mature product system and stable delivery capability.
On the other hand, three major emerging high-growth tracks continue to release dividends. Explosive demand for AI edge computing power continues to expand demand for heterogeneous computing chips; the construction of domestic low-orbit satellite Internet is accelerating, and the commercial aerospace industry chain is entering a period of rapid implementation; and the intelligent upgrading of new energy vehicles continues to drive rigid demand for automotive-grade memory and MCU chips. With multiple industry tailwinds overlapping, the company has broad market soil for new product volume ramp-up, and the external growth environment continues to improve.
During the industry reshuffling stage, market resources also continue to concentrate toward the top—that is, leading enterprises with self-developed technology barriers, a complete product matrix, and multi-scenario implementation capabilities will continue to capture market share, forming a market pattern in which the strong remain strong.
Among them, as a domestic FPGA leader, Shanghai Fudan is deeply tied to high-growth industry tracks and fully enjoys the dual dividends of cyclical recovery and domestic substitution. Under the wave of domestic AI computing power, demand for domestic edge computing power and heterogeneous computing is exploding, and the company's multi-core heterogeneous FPGA chips precisely match the needs of local computing power scenarios. With advantages including high adaptability, low cost, and customizability, they continue to replace overseas products, strengthening the company's industry competitiveness and making its leading position increasingly solid.
Therefore, as chip industry sentiment continues to rise, Shanghai Fudan, as a domestic FPGA leader, is expected to further release growth momentum by relying on its self-developed technology barriers to continuously realize domestic substitution dividends.
Summary
Reviewing Shanghai Fudan's 2026 third-quarter report, it is not difficult to find that the 221% profit surge is not a short-term bubble, but the inevitable result of the company's tempering through cycles, continuous technological iteration, and deep cultivation of refined operations.
In the short term, industry recovery combined with inventory clearance has fully released the company's profit elasticity, and the operating inflection point has been completely established; in the medium term, the product structure continues to move upscale, and a multi-category matrix hedges cyclical fluctuations, providing a solid growth foundation; in the long term, with a position in the three golden tracks of AI computing power, commercial aerospace, and automotive electronics, and relying on the wave of domestic substitution, the growth ceiling continues to broaden.
This also means that even if Shanghai Fudan's short-term share price fluctuates with sentiment, its long-term market value will still follow earnings realization—that is, if performance continues to grow rapidly, valuation repair will come naturally.
In the first half of 2026, the semiconductor sector overall experienced volatile adjustment, and the company's share price fluctuated with industry sentiment while valuation continued to be digested. As high-gross-margin new products continue to ramp up, the product structure continues to optimize, and dividends from emerging tracks continue to be released, the company's profit elasticity is expected to continue exceeding expectations, and its long-term value is entering a window for accelerated revaluation.
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