Citi: Maintains MiniMax-W (00100) "Buy/High Risk" rating; August ARR exceeds $800 million.

Citigroup released a research report maintaining a "Buy/High Risk" rating for MiniMax-W (00100), with a target price of HKD 576 unchanged. During a recent investor event, MiniMax's management revealed that its annual recurring revenue (ARR) had surpassed USD 800 million in August, a significant increase from USD 150 million in February, primarily driven by the strong adoption following the release of the M3 model and the H3 model, with notable performance in short dramas/comics and individual users. Management emphasized that the company has a strict definition of ARR, confirming only recurring revenue and excluding one-time licensing income. In August, enterprise customers contributed approximately 80% of ARR, a significant increase from 30% last year. Citigroup believes that the strong growth in enterprise customers validates the model's usability and the strategic decision to expand the experienced sales team. Management indicated that the training and iteration of M3.1, M3 Pro (with parameter scale exceeding 3 trillion), and H3.1 are underway, with the possibility of launching in the second half of this year. M3.1 aims to comprehensively validate the infrastructure pipeline, providing high-quality models with inference efficiency, and is expected to promote the growth of large language model (LLM) consumption due to its stronger intelligence and cost advantages. Management also acknowledged that the iteration pace of models after the M3 release has slowed compared to the M2 series, but they expect that after the later release of M3.1, the iteration of new models will return to a faster pace. Given the market's low expectations for the upcoming models, the bank believes that any feedback exceeding expectations could serve as a positive catalyst for the stock price.