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Earnings deep dive · Tier M Memory

Biwin (688525) H1 2026 — The Margin Is a Procurement Bet, and It's Locked for 24 Months

A fabless module maker pre-announced a 46% net margin and eight times its entire prior-year profit. That number is not operating leverage and it is not mix. It is the wedge between a wafer cost that moved 311% and a book cost that moved 57% — and management has now written that wedge into US$3.36B of lock-price contracts running to 2028. The earnings are real. The question is whose bet they are.
Published · Pre-report analysis · 688525.SH · Full H1 report due · For analysts covering memory, storage, and AI infrastructure

The setup

Start with what Biwin actually is, because the whole argument turns on it. Biwin Storage (深圳佰维存储, 688525.SH) does not own a wafer fab. It is a memory module and embedded-storage house: it buys DRAM and NAND wafers and die from the upstream originals, then packages, tests, controls and qualifies them into finished parts. Embedded storage — eMMC, UFS, ePOP, BGA SSD — is the first revenue line at north of 60% of the total, shipping into phones, tablets, AI glasses, watches, AR/VR, automotive and mini-PCs. The customer list is the good version of that business: Meta on Ray-Ban, Google, Xiaomi, Honor, Xpeng and Li Auto. It also runs its own advanced packaging capacity through Huizhou Biwin, with a wafer-level advanced packaging build at Dongguan Songshan Lake slated to begin contributing revenue from the end of 2026 at 5,000 wafers/month, stepping to 10,000/month by end-2027.

Hold that in mind — fabless packager, 60%+ consumer/embedded mix — and then read the pre-announcement, because the two do not obviously belong to each other.

Biwin Storage H1 2026 Income Statement H1 2026 · six months ended · PRC GAAP consolidated · RMB in millions Revenue RMB 15,575M +298.1% Y/Y RMB 15,575M +298.1% Y/Y Operating revenue embedded storage, SSDs, memory modules and Predator retail Gross profit RMB 8,537M 54.8% margin from 9.1% a year ago Cost of revenue (RMB 7,038M) 45.2% of revenue Operating profit RMB 7,744M 49.7% margin Operating expenses (RMB 792M) Net profit RMB 6,436M 41.3% margin Income tax (RMB 1,240M) 14.8% of total profit Credit impairment losses (RMB 31M) Asset impairment losses (RMB 36M) Losses on asset disposal (RMB 0M) Non-operating expenses (RMB 1M) R&D (RMB 344M) 2.2% of revenue Selling (RMB 152M) 1.0% of revenue General & administrative (RMB 149M) 1.0% of revenue Finance costs (RMB 128M) 0.8% of revenue Taxes & surcharges (RMB 20M) Source: Biwin 2026 interim report, consolidated statement of profit or loss · chart: tkal.news
Where Biwin's H1 2026 revenue yuan went: 54.8% survives cost of sales, 49.7% survives the other operating costs, 41.3% lands as profit before the gains booked below the operating line — against an operating loss in the same half a year ago. RMB 15,575M − RMB 7,038M = RMB 8,537M gross profit; less RMB 792M of the remaining costs the filing groups under total operating cost = RMB 7,744M. That is not the filing's operating-profit subtotal of RMB 8,388M, which is struck after impairments, other income, investment income and fair-value changes; the chart puts each of those below the operating line instead. Inflows there — RMB 34M other income, RMB 5M investment income, RMB 673M fair-value gains, RMB 1M non-operating income — cannot be drawn against a flow, so the chart shows profit excluding them: RMB 7,744M − RMB 1,309M = RMB 6,436M; that plus RMB 712M = RMB 7,148M net profit, of which RMB 7,166M is attributable to owners of the parent and RMB -18M to minority interests. Fair-value gains of RMB 673M, 4.3% of revenue, are the single largest item below the operating line. Minority interests took a loss, so profit attributable to the parent exceeds total net profit. Y/Y on revenue against RMB 3,912M in H1 2025. Six months ended .

The numbers

On Biwin filed a voluntary H1 2026 pre-announcement: revenue of RMB 15.0–16.0 billion, up 283.40%–308.96% year over year, and net profit attributable to shareholders of RMB 7.0–7.5 billion, a swing from a loss, quoted as +3200.15% to +3421.59%. Ex-items net profit is guided to RMB 6.2–7.0 billion.

Set that against the actual base. Full-year 2025 was RMB 11.302 billion of revenue and RMB 853 million of net profit — itself a 429.07% year, and a year good enough that the company declared a dividend. So half of 2026 produced roughly 1.3–1.4× the whole of 2025's revenue and 8.2–8.8× its entire net profit. Q1 alone did RMB 6.814 billion of revenue (+341.53%) and RMB 2.899 billion of net profit (+1567.85% YoY, +252% QoQ), at a 53.3% gross margin and a 42.22% net margin.

Now do the arithmetic the pre-announcement does not do for you. Back out Q1 and the implied second quarter is RMB 8.19–9.19 billion of revenue and RMB 4.10–4.60 billion of net profit — which at either end of the band lands on a net margin of about 50.1%, against Q1's 42.2%. The margin did not plateau in Q2. It expanded roughly eight points. Reverse the growth percentages off the same base and H1 2025 resolves to about RMB 3.91 billion of revenue and a net loss near RMB 226 million; the same exercise on the QoQ figure puts Q4 2025 net profit at roughly RMB 823 million — meaning almost the entirety of 2025's RMB 853 million full-year profit was earned in its final quarter. The inflection did not start in 2026. It started in , and 2026 is the second derivative.

One line in the pre-announcement deserves more attention than it has received. Headline net profit is guided to RMB 7.0–7.5 billion; ex-items net profit to RMB 6.2–7.0 billion. The headline is the larger number. That is roughly RMB 500–800 million of non-recurring gain, about 7–11% of the headline, and it is the opposite polarity from peer Longsys, whose ex-items figure exceeded its headline. It is not disqualifying and at this scale it is not the story — but anyone quoting "+3421%" should know that a tenth of it did not come from selling storage.

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