The current high-growth cycle in the storage industry is propelling Biwin Storage's financial performance to new heights. On April 15, Biwin Storage released its first-quarter report for 2026. The company achieved operating revenue of 6.814 billion yuan during the period, a surge of 341.53% year-over-year. Net profit attributable to shareholders reached 2.899 billion yuan, a significant turnaround from a loss of 197 million yuan in the same period last year. The profit for just the first quarter of this year has already far exceeded the full-year 2025 profit of 867 million yuan, with the single-quarter profit being 3.3 times that of the entire previous year. Behind this earnings explosion is the rapid scaling of AI-related storage products. Revenue from emerging AI edge-side storage products reached approximately 1.175 billion yuan in the first quarter, growing nearly fivefold year-over-year, as the company deepened its cooperation with clients such as Meta. Concurrently, the company's inventory surged to 12.069 billion yuan, a 53.4% increase from the start of the year, while prepayments also rose sharply, signaling an active effort to build up stock in anticipation of strong demand.
**AI Edge Storage Scales, Emerging Business Revenue Grows Nearly 5-Fold** AI edge-side storage products are becoming a major growth driver. The financial report shows that in the first quarter of 2026, revenue from the company's emerging AI edge-side storage products was approximately 1.175 billion yuan, up 496.45% year-over-year and 53.19% quarter-over-quarter. Having focused on the smart wearables sector for years, the company's storage products, such as ePOP, are now used in AI/AR glasses, smartwatches, and other devices from leading international and domestic companies like Meta, Google, Xiaomi, Rokid, and Leiting Innovation. As AI glasses gain traction, the company's collaboration with key customers like Meta continues to deepen, driving sustained growth in its smart wearable storage business.
**March Profit Estimated at 1.1-1.4 Billion Yuan, Exceeding Full-Year 2025** Based on the company's previously disclosed earnings forecast for January-February, the profit contribution for March alone can be estimated. According to the announcement, Biwin Storage estimated a net profit attributable to shareholders of 1.5 billion to 1.8 billion yuan for January-February. This implies a net profit of approximately 1.099 billion to 1.399 billion yuan for the single month of March. This means the profit from March alone has already surpassed the total profit for the full year of 2025. Looking at the pace of profitability changes, the company's performance shows a month-by-month acceleration. The weighted average return on equity for the first quarter reached 41.98%, an increase of 50.37 percentage points compared to the same period last year.
**Qualitative Change in Profit Structure, Operating Leverage Effect Evident** Structural changes in the income statement are also noteworthy. First-quarter operating costs were 3.182 billion yuan, resulting in a gross profit margin of approximately 53.3%, a qualitative leap from the depressed state a year earlier. Operating profit reached 3.383 billion yuan, demonstrating a significant operating leverage effect—while revenue grew more than threefold year-over-year, operating costs increased by only about twofold, highlighting the substantial profit elasticity derived from economies of scale. On the expense side, R&D expenses were 156 million yuan, up 26.78% year-over-year, reflecting continued investment in core technology areas like chip design, firmware design, and advanced packaging and testing, alongside aggressive talent acquisition. Combined selling and administrative expenses totaled approximately 160 million yuan, showing limited absolute growth, with the expense ratio narrowing significantly against the backdrop of major revenue expansion. Financial expenses were around 40 million yuan, including 59.03 million yuan in interest expenses, which aligns with rapid expansion but is comfortably covered by strong operating profits. Regarding non-recurring gains and losses, the total for the quarter was approximately 82.5 million yuan, mainly coming from gains on fair value changes of financial assets (110 million yuan). Net profit attributable to shareholders after deducting non-recurring items was 2.816 billion yuan, close to the reported net profit figure, indicating solid core earnings quality.
**12 Billion Yuan in Inventory: The Logic Behind the Surge in Stockpiling** As of the end of the first quarter of 2026, the book value of Biwin Storage's inventory stood at 12.069 billion yuan, a sharp increase of 53.4% from 7.868 billion yuan at the end of 2025, representing a net increase of about 4.2 billion yuan in a single quarter. Alongside the inventory surge, prepayments skyrocketed from 155 million yuan at the start of the year to 2.287 billion yuan, an increase of over 13 times. The simultaneous rise in both indicators points to large-scale procurement of raw materials by the company to meet robust downstream demand. From an industry perspective, the storage chip market is currently characterized by supply shortages, with DRAM and NAND prices continuing to rise. In such a cycle, ample inventory is not a risk signal but instead suggests the company has secured supplies at lower costs, which is expected to translate into higher profit elasticity in subsequent sales. The company's net cash flow from operating activities was negative 2.706 billion yuan in the first quarter, primarily due to the increased operational procurement expenditures mentioned above. In other words, the cash outflow is a result of proactive inventory building, not deteriorating operations. If the inventory is successfully sold and revenue continues to be recognized, cash flow is expected to improve accordingly.
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