Key Takeaways:
Jefferies raised its price target on MiniMax (00100.HK) to HK$533 from HK$506, keeping a Buy rating after August annualized revenue topped US$800 million.
The broker's report, published after MiniMax's interim results, said the company is focused on maximizing intelligence while minimizing costs, with gross margin expected to improve in the second half of 2026 and further expansion potential remaining in 2027.
August annualized revenue came in ahead of Jefferies' forecast of US$580 million, helped by increased usage of text models in July and the launch of the H3 model in August. Token consumption in July soared 20 times compared with early 2026. MiniMax's interim loss narrowed to US$358 million.
Shares rose 3.2 percent to HK$303 on the day, with short selling at HK$377.9 million, or 16.8 percent of turnover. Jefferies called MiniMax one of the "best Buy" stocks in the sector, with upcoming models including M3.1, M3 Pro and H3.1.
The revenue beat shows China's AI large-language-model sector is commercializing quickly, with MiniMax competing against Alibaba's Qwen and Baidu's Ernie. First-half revenue nearly quadrupled, up 283 percent, though the company remains behind pace to meet its full-year forecast in a crowded AI race that has drawn heavy investment from Tencent and ByteDance.
The target raise implies roughly 76 percent upside from the current price. MiniMax's focus on cost-efficient model training has helped it narrow losses even as it scales token usage, a metric that has become a key gauge of adoption for Chinese AI startups. The interim loss of US$358 million reflects the cost discipline behind its H3 launch, which the company says cuts inference costs at scale.
Investors will watch the rollout of M3.1 and M3 Pro, expected to drive further token consumption growth, and the H3.1 model that follows. The company's ability to sustain the August revenue run rate into the second half will determine whether it closes the gap to its full-year target, with Jefferies flagging further gross-margin expansion into 2027.
This article is for informational purposes only and does not constitute investment advice.
