Dahua Jixian: Maintaining overweight position in mainland internet stocks, recommends buying Alibaba-SW (09988), TENCENT (00700), and KINGOFT (03888)

Dahua Jixian released a research report maintaining the mainland Internet stocks weight, recommending a "buy" on Alibaba-SW (09988), TENCENT (00700), and KINGSOFT (03888). In addition, the firm maintained a "buy" rating on KINGSOFT, with a target price raised to 55 Hong Kong dollars, due to the commercialization of Beijing Kingsoft Office Software, Inc software and the opening up of multiple LLM ecosystems, which increases company efficiency and reduces costs. The firm stated that the DeepSeek model has sparked a major transformation in the artificial intelligence industry, attracting investor attention and widespread interest from Chinese AI industry developers. This is due to the lowering of deployment barriers for large language models (LLM) technology, as well as the increasing deployment and adoption of DeepSeek and Qwen models by global large-scale enterprises and application companies. The firm believes that Alibaba Cloud will be a major beneficiary, with resilient growth prospects. They have also raised Alibaba Cloud Intelligence Group's enterprise value multiple to 4 times by 2026 fiscal year, due to expectations for support from their newly launched Qwen2.5-Max model. Tencent Cloud is also prepared to launch consumer AI applications, with AI computing expected to be a major driver of Tencent's business services and cloud revenue growth.