CXMT (ChangXin Memory Technologies), the Chinese DRAM maker, reported results for July–September 2026 on October 30. Revenue rose 19.30% quarter on quarter to 118.714 billion yuan, and the gross margin reached 89.53%. Net profit attributable to parent company shareholders, however, rose just 3.01% from the previous quarter, to 54.435 billion yuan. Consolidated net profit, which includes the share attributable to minority shareholders, grew 19.38%, nearly the same pace as revenue. The key to understanding the gap is the change in the proportion of subsidiary profit that belongs to shareholders other than the parent company.
Consolidated net profit up 19%, parent-attributable profit up 3%
According to CXMT's Q3 2026 report, revenue for July–September reached 118.714 billion yuan, up 613.18% year on year, and the gross margin rose 1.94 percentage points from the previous quarter. The company cited two drivers: higher selling prices amid tight global DRAM supply and demand, and lower unit costs from expanded production scale. The 89.53% gross margin is about 2.7 percentage points above the 86.8% GAAP gross margin that Micron reported for its fiscal fourth quarter of 2026 (ended September 3). However, the two companies use different fiscal period ends and accounting standards, and gross margin is measured before R&D expenses, taxes and other costs, so the figures alone cannot be used to compare final profitability.
What stands out in these results is the wide gap between the growth of consolidated net profit and of net profit attributable to the parent. Consolidated net profit for July–September rose 19.38% from the previous quarter to 88.983 billion yuan, while parent-attributable profit rose 3.01% to 54.435 billion yuan. The difference, 34.548 billion yuan, corresponds to profit attributable to minority shareholders and accounts for about 39% of consolidated net profit.
Comparing profit as a share of revenue makes the difference clearer. The consolidated net profit margin was roughly flat, at about 74.9% in April–June and about 75% in July–September. The share of revenue accounted for by parent-attributable profit, by contrast, fell from about 53.1% to about 45.9%. In other words, consolidated net profit per 100 yuan of revenue was almost unchanged, yet profit attributable to parent shareholders fell from about 53.1 yuan to about 45.9 yuan. April–June revenue of about 99.5 billion yuan is a figure back-calculated from July–September revenue of 118.714 billion yuan and the 19.30% quarter-on-quarter growth rate.
This difference arises from how profit is allocated in consolidated accounts. For subsidiaries controlled by the parent, the full profit is generally included in the consolidated results, and the portion belonging to shareholders other than the parent is then separated out to arrive at parent-attributable profit. CXMT's minority interests reached 171.274 billion yuan at the end of September, so the allocation to minority shareholders has a large effect on overall results. Back-calculating April–June consolidated net profit from the quarter-on-quarter growth rate gives about 74.5 billion yuan, of which about 21.7 billion yuan, or about 29%, was attributable to minority shareholders. In July–September that share rose to about 39%, and the amount of minority-attributable profit grew about 1.6 times.
The cumulative figures for January–September 2026 also show the scale. Against consolidated net profit of 196.532 billion yuan, parent-attributable profit was 132.040 billion yuan, leaving 64.492 billion yuan attributable to minority shareholders. July–September alone accounted for 34.548 billion yuan of that, exceeding the roughly 29.9 billion yuan for the first half. In Japanese yen terms, 34.548 billion yuan is about ¥820 billion. This is an approximation based on the exchange rate of ¥23.65 per yuan used in an October 30 article by Business+IT in Japan.
Slower DRAM price gains alone do not explain the profit gap
Some have suggested that the slowdown in CXMT's parent-attributable profit growth reflects a calmer pace of DRAM price increases. In its July forecast, TrendForce projected that contract prices for conventional DRAM would rise 13–18% quarter on quarter in July–September 2026, a smaller increase than before. Longsys (Jiangbolong), a major memory module maker, had also guided to a quarterly net profit decline of up to 49% from the previous quarter. CXMT's own quarter-on-quarter revenue growth slowed sharply, from 95.9% in April–June to 19.30% in July–September, so growth has clearly cooled.
However, slower DRAM price gains alone cannot adequately explain the large gap between consolidated net profit growth and parent-attributable profit growth. Slower price increases could squeeze profitability, but CXMT's consolidated net margin held at about 75%, the same as the previous quarter, and its gross margin rose 1.94 percentage points. Consolidated profit growth of 19.38% was close to revenue growth, so it cannot be said that margins deteriorated significantly across the group. The fact that parent-attributable profit grew only 3.01% is most naturally explained by a higher share of profit going to minority shareholders.
CXMT itself offered an explanation consistent with this reading. At an earnings briefing held on October 30, the company cited the shareholding structure of its subsidiaries as the main reason parent-attributable profit grew only about 3%. Subsidiaries in which the parent holds a relatively low stake drove the expansion in results, so the increase in consolidated net profit did not translate directly into an increase in parent-attributable profit. The company also said it made an additional capital injection into a subsidiary in August to raise its ownership stake. These details can be found in the investor briefing record published on October 31.
The possibility of a larger allocation to minority shareholders had been pointed out as early as the earnings preview stage. Chinese business outlet Yicai noted that new production capacity at CXMT's second fabs in Beijing and Hefei was concentrated in those facilities, and that the parent's stake in them might be relatively low. The latest results confirm that the minority-attributable share of profit rose from about 29% in the previous quarter to about 39%, and that the amount allocated in July–September alone exceeded the first-half cumulative total. Determining how much profit each subsidiary actually booked, however, would require a closer look at subsidiary-level financial information and ownership stakes.
What to watch: the minority share of profit and the parent-attributable margin
To judge whether this reading holds going forward, it will be necessary to keep tracking the proportion of consolidated net profit attributable to minority shareholders. If that share drops significantly from about 39% in July–September, yet parent-attributable profit continues to grow more slowly than consolidated net profit, factors other than ownership allocation would be at work. In that case, margin deterioration and changes in the profit mix of individual subsidiaries would need to be re-examined. Figures for October–December 2026 can be calculated by subtracting the January–September cumulative total from the full-year results.
That said, the slowdown in CXMT's profit growth cannot be attributed entirely to allocations to minority shareholders. Quarter-on-quarter growth in parent-attributable profit fell from 113.4% in April–June to 3.01% in July–September, but over the same period revenue growth also slowed, from 95.9% to 19.30%. A calmer pace of revenue growth therefore also had a large effect on the slowdown in profit growth. The larger minority allocation explains only the gap between consolidated and parent-attributable profit growth in July–September; how long DRAM prices and tight supply and demand will persist is a separate question.
At the October 30 earnings briefing, CXMT management said it expects the gross margin to remain stable in October–December 2026. Even if the gross margin is maintained, however, the share of profit attributable to minority shareholders will not necessarily stay at the same level. The change in the parent's ownership stake resulting from the August capital injection into a subsidiary is also an important factor in considering future profit allocation.
For investors assessing CXMT's profitability and procurement managers tracking the DRAM market, the 89.53% gross margin alone is not enough to understand the company's profit structure. In coming results, a key indicator will be how parent-attributable profit per 100 yuan of revenue, about 45.9 yuan in July–September, changes, together with the minority-attributable share of consolidated net profit.