Huatai Securities: Domestic model capabilities are rapidly improving, and are expected to consolidate the positive trend of the industry chain.

Huatai Securities research report believes that the iteration of Kimi in July and the new GLM model in the second quarter once again confirmed the core logic of domestic models, and the iteration cycle may be further shortened. Compared to overseas closed-source models, the current technological gap of domestic models has narrowed to 3-4 months. Based on high cost-effectiveness advantages, the ability ceiling and pricing power are continuously improving. According to Huatai Securities evaluation, the performance of K3 is only slightly weaker than GPT-5.6 Sol, and GLM 5.2 is positioned against Opus 4.7. From an investment perspective, the rapid improvement of domestic model capabilities is expected to consolidate the favorable trend of the industry chain. In the short term, although there is an improvement in pricing power, competition at the model level is clearly intensifying; in the long term, the continuous improvement of Agent penetration rate is expected to further increase potential market space.