Internet - China: Heard on the Street: Feedback post China AI model initiation

Research evidence excerpt

Internet - China: Heard on the Street: Feedback post China AI model initiation

Accessible version

Internet - China

Heard on the Street: Feedback post China

AI model initiation

Industry Overview

Investors feeling “powerless” amid recent sell-off 29 June 2026

We recently met with investors in HK and mainland China to discuss our China AI model Equity

initiations and thoughts post earnings. Regarding the recent China Internet sector sell- China

off (YTD KWEB down 30% vs. -15% for MSCI China), the keyword in almost every Internet/e-Commerce

investor conversation was “powerless” - we believe sentiment is now lower than Alex Liu >>

April 25 and Sep 24 lows. Specifically, we believe investors with whom we spoke Research Analyst

feel stuck between the high opportunity cost of “not owning/overweighting Merrillalex.liu3@bofa.comLynch (Hong Kong)

enough AI semi/hardware stocks” vs. distressed China Internet stock valuation. Miranda Zhuang, CFA >>

Single stock wise, we received significant inquiries on China AI model stocks (e.g. Zhipu Research Analyst

Merrill Lynch (Hong Kong)

& MiniMax) post initiations as many were just beginning to ramp up research. Alibaba miranda.zhuang@bofa.com

sentiment turned sour recently given concern on macro/cloud competition from Joyce Ju >>

Bytedance and telecom operators. Sentiment on Tencent looks as though it may have Research Analyst

bottomed though debate on EPS remains. We also observed high interest/debate around joyce.ju@bofa.com

TCOM/Meituan/BILI/NTES/JD/BIDU/Kuaishou. Joanna Du >>

Research Analyst

Merrill Lynch (Hong Kong)Key themes: AI model, Bytedance, regulation, macro joanna.du@bofa.com

Key sector topics/themes that appeared during our conversation with investors were: 1)