Morgan Stanley: Enabler and basic models are still the key investment themes in Chinese AI. Extensive applications also bring investment opportunities to beneficiaries.

Morgan Stanley released a research report stating that China's artificial intelligence (AI) is entering a new stage, shifting from catching up in technological capabilities to capturing value. The focus is shifting from training to reasoning, from technology to application, and from potential to actual profitability. The bank believes that at the current stage, enablers and basic models are still key investment themes, but the widespread use of AI also brings investment opportunities for beneficiaries. In their analysis of risk and return in AI application companies, BEISEN HOLDING (09669), MEITU (01357), Beijing Roborock Technology (688169.SH), Midea Group Co., Ltd (000333.SZ), and Ecovacs Robotics Siasun Robot & Automation (603486.SH) have performed well. MiniMax-W (00100) and KNOWLEDGE ATLAS (02513) are key players in China's AI basic model supplier space, while Alibaba Group Holding Limited Sponsored ADR (BABA.US) is positioned as the best full-stack AI platform among the companies covered by the bank. Morgan Stanley specifically recommends Contemporary Amperex Technology (300750.SZ,03750), Anhui Yingliu Electromechanical (603308.SZ), and Sieyuan Electric (002028.SZ) as key targets in the power sector. The bank continues to be bullish on Cambricon-U (688256.SH), ILUVATAR COREX (09903), NAURA Technology Group (002371.SZ), Advanced Micro-Fabrication Equipment Inc. China (688012.SH), ACM Research (ACMR.US), Semiconductor Manufacturing International Corporation (00981), and XinXing Electronics (3037.TW). These AI enablers will benefit from the long-term trend of semiconductor localization in China.