China Internet Sector: Improving marketing feedback; debate remains on LLM value creation and ROI

研报英文原文证据摘录

China Internet Sector: Improving marketing feedback; debate remains on LLM value creation and ROI

narrowing. However, they remain cautious on the pace of topline recovery into 2H and

investment scale for international business. PDD: We observed a pick up in investor

interest, alongside Shein's potential IPO which the market might start to attribute value

to PDD's Temu. Valuation is undemanding at 8x 2026E P/E with potential earnings

surprises (investment income reversal in 2Q, and easier OMS growth comp in 2H).

Baidu: Key focus remains on progress of Kunlunxin IPO and other catalysts (e.g.

Southbound inclusion, dividend payout). While investors are generally positive about

Baidu's SOTP value unlocking, the potential step-up of AI investment hurting 2H26

earnings is a major concern. Zhipu and MiniMax: Investor interest in model companies

remains high with better sentiment for Zhipu due to its model leadership, and we see

increasing interest from global investors to understand China's model landscape. While

recent price correction reflects heightened competition concern post Kimi K3 launch,

future model upgrades from listed players remain the key to monitor. Kuaishou: Key

debates center on Kling ARR ramp-up and the video genAI competitive landscape, while

core business concerns should be largely priced in. Risk-reward is attractive with the

upcoming Kling model upgrade and further spin-off progress. A gradual shift toward

SOTP framework should unlock meaningful valuation upside for Kuaishou. Bilibili:

Investors are generally positive on continued ad outperformance, while near-term

gaming catalysts appear limited, with the new pipeline backend-loaded into Q4.

Fundamentals remain constructive, though the Tencent sell-down overhang may weigh

on near term sentiment.