China Artificial Intelligence: Kimi K3 resets frontier-model valuation, but 50%+ sell-off overstates impact on Zhipu‘s ARR trajectory, retain OW

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China Artificial Intelligence: Kimi K3 resets frontier-model valuation, but 50%+ sell-off overstates impact on Zhipu‘s ARR trajectory, retain OW

Asia Pacific Equity Research

21 July 2026

China Artifical Intelligence

Kimi K3 resets frontier-model valuation, but 50%+ sell-

off overstates impact on Zhipu's ARR trajectory, retain

OW

We remain OW on Zhipu following a 50%+ correction after Moonshot launched Hong Kong

Kimi K3. K3 raises uncertainty about which company can sustain China’s Internet

frontier-model leadership and changes Zhipu’s stock narrative from AC Olivia Xu“uninterrupted domestic model leadership” to “one of the China frontier AI labs.”

(86-21) 6106 6138

This narrative change and a more competitive LLM market than we had initially olivia.w.xu@jpmorgan.com

expected lead us to lower our long-term valuation framework for both Zhipu and SAC Registration Number: S1730525060001

MiniMax from a 30x 2030E P/E to 20x, equivalent to a ~30% discount to the Alex Yao

c.30x P/ARR framework adopted by investors. However, we make limited (86 21) 6106 6505

changes to our ARR forecasts: GLM-5.2 remains among China’s top frontier alex.yao@jpmorgan.com

models today, while GLM-5.3 and a new 2T+ flagship are expected over the SAC Registration Number: S1730523020001

coming months. We therefore continue to expect Zhipu to remain part of China’s Daniel Chen

frontier group across the next model cycle, sufficient to support continued ARR (86-21) 6106 6205

expansion in today’s compute-constrained market. Following the recent de-rating, daniel.q.chen@jpmorgan.com

we believe the market has largely priced in a lower valuation multiple and is SAC Registration Number: S1730521040001

overly pessimistic on Zhipu’s commercial trajectory. For MiniMax, we apply the J.P.