Jefferies Lowers Zhipu Target Price
BlockBeats reported on September 7 that Jefferies issued a research note, cutting Zhipu's target price to HK$1,183.79 from HK$1,299.80, with a hold rating maintained. The report said Zhipu's guidance of $2.4 billion in annual recurring revenue by end-2026 exceeded expectations, but its sustainability is in doubt.
Sustainability Concerns and Forecast Adjustments
The report cited multiple factors: a high base in August, uneven growth in computing power supply, high customer concentration, and low switching costs. While Zhipu's cloud business gross margin improved in H1 2026, it may decline in H2 due to the rollout of new domestic GPU clusters and the resumption of the Coding Plan.
Jefferies raised its revenue forecasts for Zhipu for 2026-2029 by 37% to 119%, reflecting faster cloud segment growth, and cut net loss estimates by 14% to 21%. In sum-of-the-parts valuation, the cloud segment multiple was reduced from 50x to 30x estimated 2026 ARR to better align with overseas peers.
Industry View
Jefferies still sees the Chinese large language model market as overcrowded and prefers full-stack cloud platforms with advantages in computing power, data, and monetization, such as Alibaba (09988.HK) and ByteDance, over independent AI labs.