CLSA: Z.AI (02513) Has Established a High-Quality Customer Base in Markets Outside China; Target Price HK$1,907

CLSA has issued a research report stating that Z.AI (02513) has established a high-quality and continuously expanding enterprise customer base in markets outside China, reiterating its "Outperform" rating with a target price of HK$1,907. CLSA conducted a questionnaire survey on the adoption of large language models by enterprises in Asia outside China, interviewing 1,200 IT executives and managers. The results show that the adoption rate of Z.AI models among surveyed enterprises is 1.8%, reflecting substantial room for growth; 5.1% of respondents plan to start using GLM models in the next 6 to 12 months. If all such intentions actual adoption, its customer base would expand to nearly four times the current level, with the strongest momentum in the six ASEAN countries, where the proportion planning to adopt reaches 6.8%. The survey shows that Z.AI's enterprise customers are of high quality, continuously expanding AI budgets and increasing investment in GLM models. Among them, 55% expect their IT budgets to increase by more than 20% in 2027, and 82% plan to increase GLM-related spending, higher than the 77% and 55% for Anthropic and DeepSeek models respectively; 77% of GLM customers believe that switching to other models would involve moderate to significant switching costs, and 82% have further trained or fine-tuned their own models on the GLM platform. The bank stated that overall, a financially strong enterprise customer base, ample room for penetration improvement, and scalable distribution channels through hyperscale cloud service providers can all support GLM's growth prospects in Asian markets outside China, and it will closely monitor cloud revenue growth and new partnership projects.