AI TRENDS | BofA Reiterates Buy On Zhipu, Keeps HK$1,250 Target

BofA Securities reiterated its Buy rating on Zhipu (02513) and kept its target price at HK$1,250, according to ETNet. The bank said Zhipu's first-half 2026 revenue was strong but slightly below market expectations because key revenue was concentrated later in the period, as the GLM 5.2 model only became widely popular from mid-June. It said adjusted net loss widened from the second half of last year, while cloud gross margin improved and R&D spending remained under control. BofA said Zhipu's model development capability remains strong, with GLM 5.3 and GLM 5.3 Flash leading in both premium and low-cost segments, and noted improved inference computing capacity. It added that the company is now in a harvest phase after completing an equity financing round in July. The bank also said Zhipu's full-year recurring revenue guidance for end-2026 is $240 million, below market expectations of $250 million to $300 million, which could raise concerns about slowing growth. BofA raised its 2026-2028 revenue forecasts by 7% to 25% and cut its adjusted net loss estimates by 2% to 68%. It said potential near-term catalysts include a possible launch of the GLM 5.5 model in the fourth quarter of 2026 and the expiry of the lock-up period in January 2027.