CMB International raised its price target on Zhipu (02513.HK) by 32 percent to HK$1,985, maintaining a "Buy" rating, after the Chinese AI company's annualized recurring revenue accelerated to $1.6 billion in August from $1 billion in July. The bank lifted its 2025-2028 revenue CAGR forecast to 275 percent from 199 percent, citing six GLM model iterations in 11 months, surging user engagement, and a domestic GPU cluster that cut per-token costs about 80 percent year to date.
CMB International raised Zhipu's target price 32 percent to HK$1,985 as annualized recurring revenue reached $1.6 billion in August, up from $1 billion in July.
Zhipu's balance of model iteration speed, intelligence level and per-task cost should sustain its position on the LLM industry's Pareto frontier, providing room for long-term monetization, CMB International said in a research note published Sept. 3, keeping its "Buy" rating.
The bank lifted its 2025-2028 revenue compound annual growth rate forecast to 275 percent from 199 percent, projecting RMB 38.1 billion in total revenue by 2028. Zhipu completed six GLM model iterations in 11 months, raising its intelligence index from 32 to 60. MaaS platform registered users grew 144 percent to 7.4 million, paid daily active users rose 603 percent, and token call volume increased more than 40-fold year to date, while average API pricing climbed about 101 percent. Management guides annualized recurring revenue to $2.4 billion by year-end.
The revision follows Zhipu's first-half results, in which open platform and API revenue reached RMB 825 million, up more than 27-fold year over year and representing 86.5 percent of total revenue. A domestic 100,000-GPU cluster and rebuilt inference stack cut per-token costs about 80 percent year to date, lifting open platform gross margin to 24.6 percent from negative 0.4 percent a year earlier. The bank's compute multiplier — revenue per RMB 1 invested in computing power — rose 14-fold year over year.
Zhipu's GLM-5.3 Flash, launched with 320 billion total parameters and 18 billion activated, topped OpenRouter's leaderboard on its first day and processed about 60 trillion tokens in six days, the company said. The model family's rapid iteration from GLM-4.6 through GLM-5.3 in 11 months has kept pace with overseas leaders on coding benchmarks while undercutting them on cost, with flagship task costs around $0.20 and Flash at about $0.045. The company's first-half loss narrowed 12.5 percent year over year to RMB 2.07 billion, with adjusted net loss of RMB 1.96 billion now below its RMB 2.13 billion R&D spend — a threshold management said shows gross profit has begun to feed back into research.
The stock's next catalyst is management's year-end ARR target of $2.4 billion, which would represent another 50 percent increase from August levels. CMB International also expects overseas cloud service provider partnerships to materialize within one to two months, potentially expanding distribution for Zhipu's open platform and API offerings beyond its current base of 7.4 million registered MaaS users.
This article is for informational purposes only and does not constitute investment advice.
