Key Takeaways:
Morgan Stanley raised Zhipu AI's target price nearly 72% to HK$1,700, citing stronger compute access and fresh financing.
"China's large-model industry is building a healthier commercialization environment," Gary Yu, an analyst at Morgan Stanley, said in the report.
The upgrade lifts the target from about HK$990, implying roughly 30 percent upside from Zhipu's last close of HK$1,303. Shares rose more than 4 percent intraday Thursday, taking five-day gains past 37 percent. The Hang Seng Index opened up 0.53 percent at 25,805.18, while the Hang Seng Tech Index gained 0.85 percent.
The report argues China's open-weight model market is shifting from price competition to monetization based on model intelligence, a view that runs counter to widespread expectations of product homogenization and price wars. Without adequate compute, model training and inference stall, while fresh financing supplies the cash to fund a loss-making phase. Both constraints improving at once drove the upgrade, the bank said.
In the same report, Morgan Stanley kept a constructive view on MiniMax, calling the upcoming M3 upgrade and M3 Pro key releases, but cut its target price to HK$900 on the view that growth will land later than Zhipu's. MiniMax shares rose 4.8 percent Thursday. The bank also expressed a bullish view on Alibaba, citing its full AI supply chain, compute advantages, and years of cloud growth.
The upgrade reflects institutional conviction that China's AI leaders can convert model quality into revenue, a shift that may support a sector-wide re-rating of Hong Kong-listed AI names. Investors will watch Zhipu's next financing round and model release for confirmation of the growth trajectory.
This article is for informational purposes only and does not constitute investment advice.
