The froth behind the stock price breaking 1,000: How far is Muxi Co., Ltd. from breaking even?
Editor | Yu Erhu
Produced by | Yujian Column
In 2025, the domestic GPU sector ushered in an unprecedented capital boom.
Cambricon's market value exceeded 860 billion yuan, Hygon Information stabilized at 730 billion yuan, Moore Threads soared to 340 billion yuan immediately after its listing, and Muxi Co., Ltd. quickly joined the 100-billion-yuan market value club after landing on the Sci-Tech Innovation Board at the end of 2025. On July 9, 2026, Muxi's share price once broke through 1,000 yuan, pushing its total market value to a high of 400 billion yuan.
However, on the very same day, the company urgently released a clarification announcement, denying market rumors that some product orders had been scheduled for next year, and its share price immediately dropped sharply.
This rumor-refuting announcement acted like a basin of cold water poured on the heads of frenzied investors.
Looking at Muxi's first annual report since its listing, the company recorded 1.644 billion yuan in revenue in 2025, but its net profit attributable to shareholders of the parent company posted a loss of 789 million yuan, with a cumulative unrecovered loss as high as 1.549 billion yuan. Behind the doubling of revenue growth lies continuous massive cash burn.
With the enthusiasm of capital fading away, what can Muxi rely on to support its hundred-billion-yuan valuation?
Profitability Dilemma: Revenue Growth Cannot Hide Continuous Cash Burn
Muxi's 2025 annual report shows that the company achieved operating revenue of 1.644 billion yuan, a surge of 121.26% year-on-year compared to the same period of the previous year. This growth rate is indeed outstanding among the "four little dragons" of domestic GPUs.
Sales of training-and-integrated GPUs reached 33,600 units, a year-on-year increase of 147.31%, while sales of inference GPUs grew by more than 800%. On the surface, this is a report card of rapid growth. But upon closer inspection, the problems are far more severe than the figures suggest.
The net profit attributable to shareholders of the parent company was -789 million yuan. Although the loss narrowed by 43.97% year-on-year, the net profit after deducting non-recurring gains and losses was -830 million yuan, and the loss scale remains staggering.
As of December 31, 2025, the cumulative unrecovered loss in the company's parent company statements reached 1.549 billion yuan.
This means that Muxi's cumulative loss since its establishment has exceeded 1.5 billion yuan, and there is no clear timetable for turning losses into profits in the short term.
The situation in the first quarter of 2026 remains not optimistic.
The quarterly revenue was 562 million yuan, a year-on-year increase of 75%, and the net profit attributable to shareholders of the parent company was -98.84 million yuan. Although the loss narrowed by 76% quarter-on-quarter, there is still a significant distance to break-even. The company previously stated that it is expected to achieve break-even as early as 2026, but judging from the data of the first quarter, the difficulty of achieving this goal is not small.
According to the observation of Yujian Column, R&D investment is the biggest black hole swallowing profits.
R&D expenses in 2025 reached as high as 1.027 billion yuan, accounting for 62.49% of operating revenue. Although this proportion has decreased compared with 121.24% in 2024, the absolute amount is still rising. The R&D team of 675 people accounts for 73% of the total employees, and more than 70% of the R&D personnel have a master's degree or above, leading to persistently high labor costs. From 2022 to 2024, Muxi's total R&D expenses in three years amounted to 2.247 billion yuan, accounting for more than 282% of revenue.
This rate of burning money is unsustainable even for a listed company on the Sci-Tech Innovation Board.
In addition, the continuous negative cash flow from operating activities is another dangerous signal.
The net cash flow generated from operating activities in 2025 was -1.26 billion yuan. Although it has improved compared with -2.148 billion yuan in the same period of the previous year, it is still a huge net outflow. The company admitted in its annual report that the customer payment collection time lags behind the revenue recognition time, resulting in a large balance of accounts receivable. In 2025, the credit impairment loss reached 29.14 million yuan, and the asset impairment loss was as high as 174 million yuan, mainly affected by inventory depreciation.
To support business development, the company had to make strategic stockpiling, which led to a substantial increase in the ending inventory balance and further exacerbated the capital pressure.
The problem is even more obvious when looking at quarterly data. In the fourth quarter of 2025, the company achieved operating revenue of 408 million yuan, but the net loss attributable to shareholders of the parent company was as high as 444 million yuan, making it the quarter with the most severe loss throughout the year. Although the loss narrowed in the first quarter of 2026, the main reason was driven by revenue growth rather than a fundamental improvement in the cost structure.
Against the backdrop of a failure to significantly increase gross profit margin and a still high period expense ratio, Muxi faces extremely arduous challenges in achieving sustained profitability.
Competitive Disadvantage: Wandering at the Door of Large Internet Companies
The domestic GPU market is rapidly dividing into two camps.
One is the first echelon represented by Huawei Ascend, Cambricon, and Hygon Information, which has secured core orders from large internet companies and operators, achieving large-scale profitability or approaching profitability.
The other is the second echelon represented by Muxi, Moore Threads, Biren Technology, and Iluvatar CoreX, which are still struggling to enter the supply chain of core customers.
Data shows that the total shipment of China's AI accelerator cards in 2025 was about 4 million units, of which domestic manufacturers totaled 1.65 million units, accounting for 41%. Huawei Ascend ranked first among domestic manufacturers with a shipment of 812,000 units, and Cambricon's annual delivery volume reached 120,000 units.
Cambricon recorded 6.5 billion yuan in revenue in 2025 and a net profit of 2.06 billion yuan attributable to shareholders of the parent company, completely getting out of the loss quagmire. Hygon Information achieved 14.4 billion yuan in revenue and a net profit of 2.55 billion yuan in 2025, becoming the domestic AI chip enterprise with the largest profit scale. Moore Threads achieved its first quarterly profit of 29.36 million yuan in the first quarter of 2026.
In contrast, Muxi's position is rather awkward.
Although its revenue of 1.644 billion yuan in 2025 ranked first among the "four little dragons" of domestic GPUs, there is still a gap of several times compared with Cambricon and Hygon Information.
Muxi's customer structure is mainly composed of national public AI computing power platforms, operator intelligent computing platforms, and commercial intelligent computing centers. Its penetration in the internet industry, the most core downstream application field of GPUs, is extremely limited.
According to the disclosure in the prospectus, the two internet enterprises that Muxi is currently focusing on developing are still in the product testing stage. One of the companies started sample card testing in the first half of 2024, and it is expected to complete the performance test by the end of September 2025, before entering the cost evaluation and product introduction phase. The other company started contact in the first quarter of 2025, and it is expected that small-batch trial production orders may be placed in the fourth quarter of 2025.
This means that Muxi did not substantially enter the core supply chain of any leading internet enterprise in 2025.
In contrast, among its competitors, Cambricon's largest customer is ByteDance, with a pre-purchase order volume of 200,000 units. In addition to Tencent, Enflame Technology has also obtained small-batch orders from other internet customers.
In June, Reuters quoted people familiar with the matter as saying that ByteDance is negotiating procurement with Iluvatar CoreX and Baidu's Kunlunxin. In this market where giant orders determine life and death, Muxi is obviously half a beat slower.
In terms of technical strength, Muxi's product performance is at the forefront in China, and its self-developed MXMACA software ecosystem is highly compatible with CUDA, which is its differentiated advantage.
However, at the advanced threshold of cluster capability that determines the outcome of the competition, Muxi still lags behind its main competitors. Moore Threads has completed the deployment of a 10,000-card cluster, Hygon has the practical capability of large-scale clusters in the industry, and Cambricon achieved an annual delivery volume of 120,000 cards in 2025.
Although Muxi is catching up quickly, the gap in cluster scale and practical experience is difficult to make up in the short term.
Yujian Column believes that the situation of the new-generation product Xiyun C600 also deserves attention.
This product is developed based on domestic advanced processes, aiming to build a closed-loop domestic supply chain from design, manufacturing to packaging and testing. It has completed chip return and successfully lit up in July 2025, and is expected to enter risk mass production by the end of 2025. However, from engineering verification testing to large-scale mass production, a series of work such as performance optimization, software stack improvement, supply chain preparation, and customer introduction still need to be completed, and the whole process is full of uncertainties.
If the mass production progress of C600 fails to meet expectations, Muxi will face greater pressure on the core selling point of independent and controllable domestic supply chain.
What Can Support the Realization of 400-Billion-Yuan Market Value
On July 9, 2026, Muxi's share price broke through 1,000 yuan for the first time, and its total market value once stood at 400 billion yuan. However, the company itself reminded investors in the announcement that the latest net profit is still negative, there is no reference price-earnings ratio, and the price-to-book ratio is more than 30 times, which is significantly higher than the average valuation level of its industry.
This kind of self-warning is extremely rare in the A-share market, and it also reflects the management's concern about the current valuation from the side.
In fact, Muxi's high valuation is built on an extremely fragile logic.
First of all, the company has not yet made a profit and cannot use the traditional P/E ratio model for valuation. The market's pricing for it is completely based on expectations of future profitability. However, it still lost nearly 100 million yuan in the first quarter of 2026, and the goal of turning losses into profits for the whole year is full of uncertainties.
Secondly, the competition in the domestic GPU sector is intensifying sharply. From the end of 2025 to 2026, many enterprises such as Moore Threads, Muxi, Biren Technology, Iluvatar CoreX, and Enflame Technology have gone public or promoted IPOs intensively. The supply of the capital market has increased significantly, and the scarcity premium is being rapidly diluted.
Judging from the valuations of comparable companies in the same industry, Cambricon's market value exceeded 860 billion yuan in 2026, with a P/E ratio based on forecasted net profit of more than 170 times. Hygon Information has a market value of about 736.2 billion yuan and a P/E ratio of about 75 times. Moore Threads has a market value of about 340.5 billion yuan and is still in a loss-making state.
The entire domestic GPU sector has the problem of overvaluation, and Muxi, as a member with relatively weak fundamentals, may have a larger valuation bubble.
Yujian Column observed that Muxi admitted a number of risks in its annual report.
The GPU chip industry in which the company operates is a capital and technology-intensive field, characterized by extremely high technical barriers and intensive R&D investment. If product iteration and technological innovation cannot meet market demand, the company may face risks such as lower-than-expected sales of main products, continuous decline in gross profit margin, and long-term failure to achieve profitability.
In addition, affected by the geopolitical situation, in order to ensure the stability of raw material supply, the company needs to actively make strategic stockpiling, which not only increases the inventory balance but also brings the risk of depreciation.
Besides, the risk of accounts receivable recovery cannot be ignored either.
The prospectus shows that the book value of Muxi's accounts receivable from 2022 to 2024 was 0 yuan, 37.1 million yuan, and 479 million yuan respectively, accounting for 0%, 70%, and 65% of the revenue in the same period. In the first quarter of 2025, accounts receivable reached 615 million yuan, accounting for 192% of the revenue in the same period. Some customers adopt a back-to-back settlement model, that is, the customer needs to receive the project payment from the end user before paying the company, which greatly extends the payment collection cycle. Credit impairment losses of 55.66 million yuan and 29.14 million yuan were accrued in 2024 and 2025 respectively, and the risk of bad debts persists.
In February 2026, Muxi once attracted market attention for using 2.9 billion yuan of raised funds for cash management.
Although this is compliant in procedure, it also reflects from the side that the company has abundant funds on hand but lacks sufficient investment channels, which forms a certain contrast with its huge financing. By the end of 2025, the company's total assets were 136.75 billion yuan, of which monetary funds and trading financial assets totaled more than 7 billion yuan, and the asset-liability ratio was only 37.26%, with a relatively stable financial structure. But whether this stability can be transformed into a sustained competitive advantage remains to be seen.
Conclusion
Muxi is a microcosm of the rapid rise of the domestic GPU sector.
It has a high-level technical team, good product performance, abundant funds on hand, and the market space brought by policy dividends. The doubling of revenue in 2025 and the continuous narrowing of losses have indeed shown the company's positive development momentum. But all these positive factors are not enough to support a market value of 400 billion yuan.
Cumulative losses of 1.549 billion yuan, a loss of nearly 100 million yuan in the first quarter of 2026, no access to the core supply chain of large internet companies, and a price-to-book ratio of more than 30 times, these data outline a reality where fundamentals and valuation are seriously disconnected.
The long-term prospects of the domestic GPU industry are beyond doubt, but in this sector, the enterprises that can ultimately win must be those that can not only achieve continuous technological breakthroughs but also quickly realize commercialization.
What Muxi needs is not speculation and bubbles in the capital market, but solid product iteration, effective cost control, and real market-oriented orders.
When the tide recedes, only those enterprises that can prove their profitability can stay on the stage. For Muxi, there is still a long way to go from a 100-billion-yuan market value to being truly worth 100 billion yuan.