Longsys Q3 Net Profit Expected to Surge Over 740%, but Company Warns Memory Price Rally Momentum Is Fading
nashnova research
Longsys (江波龙) guided nine-month attributable net profit to RMB 14.0–14.9 billion, an 18× year-on-year surge, while explicitly warning that the margin boost from rising memory prices is fading as the industry shifts from a price cycle to an AI-driven technology cycle.
An 18× profit surge — how big are the numbers?
Nine-month attributable net profit is guided at RMB 14.0–14.9 billion, up 1,865%–1,991% year on year; revenue at RMB 38.0–40.0 billion, more than double last year's RMB 16.7 billion.
Q3 alone, adjusted net profit hit RMB 3.75–4.75 billion, up 740%–964% — still massive in absolute terms, but sequential growth has clearly slowed.
This means → the steepest part of the price-driven profit curve is already behind; what comes next needs a different engine.
Why is the price tailwind fading?
Longsys stated plainly: DRAM and NAND Flash price gains have narrowed materially against a higher base.
In plain terms = last year prices climbed from a trough — low base, big percentage gains, fat margin leverage. Now prices sit high; the same 10% increase delivers far less incremental profit.
The company itself framed the shift as "consumer-price cycle → AI-driven technology cycle" — an admission that the easy-money phase of riding price hikes is ending.
How much has the balance sheet improved?
Q3 operating cash flow turned net positive — previously the company booked profits but struggled to convert them into cash; that gap is now closing.
Period-end debt-to-asset ratio dropped below 50%, signaling leverage repair after a rapid-expansion phase.
This means → the income statement and balance sheet are both moving in the right direction — a substantive improvement in financial health, not just headline numbers.
What replaces the price tailwind?
Longsys is betting on customer-mix upgrades: a rising share of tier-one, premium, and global clients.
On the product side, high-end modules — UFS 4.1, mSSD (compact solid-state drive modules), ePOP5x — are already in volume commercial use at major customers; international brands Lexar and Zilia continue to grow rapidly.
On-device AI partnerships — running AI locally on a device — now extend to AMD, Qualcomm, Unisoc, and leading global CPU makers.
What is the key thing to watch?
The fading price cycle is the company's own call, not an outside forecast — that puts the burden of proof squarely on Longsys in coming quarters.
This means → the market will focus on one question: can AI-oriented products deliver enough scale and margin to fill the gap left by the vanishing price tailwind?
In plain terms = the story has shifted from "prices rise, profits follow" to "prove the new products can actually hold the line" — a harder test by a notch.
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