Zhouyin International: Raises target price for Z.AI (02513) to HKD 1985, maintains "Buy" rating.

According to a research report released by CMB International, Z.AI (02513) has shown a robust trajectory of annual recurring revenue growth and strong prospects. The company's disclosure of new user scale and engagement further reinforces the positive outlook of the firm. Driven by stronger annual recurring revenue growth, the firm has raised its revenue compound annual growth rate (CAGR) forecast for 2025 to 2028 from 199% to 275%, and has increased the target price from HKD 1,503.9 to HKD 1,985, maintaining a "Buy" rating. The firm believes that the company has achieved an effective balance between the pace of model iterations, intelligence levels, and the cost per task, which is expected to maintain its Pareto frontier position in the large language model industry and provide ample space for long-term monetization. The research report pointed out that Z.AI completed six iterations of GLM within 11 months, with the intelligence index rising from 32 to 60; the number of registered users on the MaaS platform grew by 144% to 7.4 million, while the number of paid daily active users increased by 603%. Additionally, the volume of token calls has surged more than 40 times from the beginning of the year, and the average selling price of the API has risen by approximately 101%. As of August 2026, the company's annual recurring revenue from its open platform and API reached USD 1.6 billion, up from USD 1 billion in early July, with management guiding for USD 2.4 billion by the end of the year. The deployment of 100,000 card chip clusters and the reconstruction of the inference stack have led to an approximately 80% decrease in the cost per token year-to-date, with computing power multiples increasing 14 times year-on-year, while the gross profit margin of the open platform is expected to reach 24.6% in the first half of 2026. CMB International has raised its revenue CAGR forecast for 2025 to 2028 from 199% to 275%, and expects total revenue to reach RMB 38.1 billion by 2028.