CICC: Yu Zhipu(02513) "Outperform Industry" Rating, Target Price HKD 688

CNFinance App learns that China International Capital Corporation (CICC) released a research report stating that Zhipu (02513) is expected to generate revenues of 720 million, 1.75 billion, 3.67 billion, and 7.67 billion yuan from 2025 to 2028, with a CAGR of 120%. The firm is optimistic about the company’s iterative improvements in foundational model capabilities and the realization of coding scene applications. Valuing the company against leading overseas large model companies, it assigns a “buy” rating and a target price of HKD 688 (2028 P/S ratio of 40x, with a long-term discount rate of 7%). Currently, the company’s stock trades at a 25x P/S ratio for 2028, representing a 42% upside potential from the current share price. The company is a leading Chinese and world-class large model provider.

CICC’s main points are as follows:

Originating from Tsinghua University technological achievements, technical depth and model capabilities are the foundation

Founded in 2019, the company focuses on the deep development of the GLM series foundational models, honing core abilities in coding, reasoning, and agentic functions. The latest generation GLM-5 model has achieved state-of-the-art results in benchmarks such as HLE and SWE, and has received widespread praise from users domestically and internationally.

Commercial value realization of models, empowering various industries

Relying on the MaaS platform to deliver model capabilities, the firm expects a CAGR of over 130% in revenue from 2023 to 2027. API revenue is projected to become the main growth driver. The firm estimates that by early 2026, the company’s API-related ARR has approached 600 million yuan, multiplying several times compared to the same period last year. Meanwhile, the company covers numerous industries including internet, software, and semiconductors, focusing on unlocking model value to enhance customer productivity.

AI coding TAM may reach trillions of yuan, Zhipu has a leading edge

AI coding, as the fastest-growing application scenario for AI deployment, is still in early penetration stages. The firm estimates the TAM could reach trillions of yuan. Zhipu concentrates on refining coding scenarios, possessing core advantages such as low hallucination rates, high stability, strong reasoning, and tool usage capabilities. It is expected to continue leading in coding applications and extend into more enterprise scenarios.

What sets this firm apart from the market?

The firm is optimistic about Zhipu’s foundational model capabilities and its continued leadership in AI coding scenarios, with potential to serve more domestic and international clients.

Potential catalysts

Release of new generation models; rapid growth in API and coding ARR.

Risks

R&D progress slower than expected; commercialization expansion underperforming; intellectual property risks; funding shortages; intensified competition; data security risks.