China Merchants Securities International: Raising the target price of Zhi Spectrum (02513) to HK$1,600, commercialization progress exceeded expectations

The Zhitong Finance App learned that China Merchants Securities International released a research report saying that Zhi Spectrum (02513)'s revenue in the first half of the year increased 400% year on year. In August, API's annualized revenue reached 1.6 billion US dollars, and commercialization progress exceeded expectations. Maintaining the “Overweight” rating, the revenue and profit forecasts were raised, and the target price was raised from HK$1,282 to HK$1,600.

The bank believes that Smart Spectrum has established the most competitive “intelligence-cost” Pareto frontier among large domestic model companies with continuous and rapid model iteration capabilities, and that GLM 5.3 (cutting-edge intelligence) and 5.3 Flash (inclusive and cost-effective) are firmly stuck in the two ecologies. Annualized revenue is expected to reach 2.4 billion US dollars at the end of the year. The increase in computing power multiplier and gross margin indicates an increase in self-hematopoietic capacity. While drastically increasing revenue forecasts, the bank anticipates that the point where intelligence spectrum will turn loss into profit may be brought forward to 2028.

In addition, according to the report, Zhi Spectrum management said that there is still a gap between the 24.6% gross profit margin of the API business and the gross margin level of more than 50-60% for overseas peers, mainly due to the utilization rate of computing power clusters, resource redundancy and migration costs caused by alternating old and new models, and there is still room for improvement in infrastructure. The company has initiated a high-value and low-cost model of routing and task stratification, and is working towards 50% long-term gross margin. R&D expenses in the first half of the year were RMB 2.13 billion, and the R&D rate fell to 223% from 835% in the same period last year.