CMSI Initiates 2 Chinese AI Stocks at Overweight With Bullish Forecasts

China Merchants Securities (CMSI) initiated coverage on two of China’s leading large model companies, KNOWLEDGE ATLAS and MINIMAX-W, with “Overweight” ratings, forecasting revenue growth of over 170% for both firms through 2028.

"The commercialization flywheel of Agents in China's large model industry is unstoppable," CMSI said in a report, highlighting an explosive stage of agent capabilities that is driving exponential growth in the sector.

The brokerage set a price target of HKD 1,282 for KNOWLEDGE ATLAS (02513.HK), forecasting a revenue compound annual growth rate of 172% from 2025 to 2028. For MINIMAX-W (00100.HK), CMSI established a HKD 982 price target, projecting a 193% revenue CAGR over the same period.

The bullish initiation points to a rapidly escalating China-US rivalry in large models, a market projected to hit $206.5 billion globally by 2029. For investors, the ratings signal a new phase of accelerated commercialization for pure-play AI firms in China, distinct from giants like Alibaba and ByteDance.

Differentiated Players in a Surging Market

CMSI’s report underscores the massive expansion in China's AI sector, where average daily token consumption has surged over a thousandfold in two years. The bank projects the national AI market will reach RMB 993 billion by 2030.

Against this backdrop, KNOWLEDGE ATLAS and MINIMAX-W are positioned as focused, pure-play large model companies. CMSI notes their advantages in "high technological focus, short decision-making chains, and strong neutrality" allow for differentiated competition against larger, more diversified players.

Bullish Financial Projections

The "Overweight" ratings are underpinned by aggressive financial forecasts.

KNOWLEDGE ATLAS: CMSI is positive on the company's pursuit of "the upper bound of model intelligence" and its pricing power. The bank sees its adjusted net loss margin narrowing dramatically from -439% in 2025 to -14% by 2028. The price target corresponds to a forward price-to-sales ratio of 35x for fiscal year 2028.
MINIMAX-W: The focus here is on "full-modality in-house development and extreme cost efficiency." CMSI anticipates its adjusted net loss margin will shrink from -317% in 2025 to just -12% in 2028, with a forward PS ratio of 20x for fiscal year 2028.

The aggressive growth targets reflect the brokerage's conviction that the deployment of AI agents will continue to drive a massive increase in model usage. The next catalyst for MINIMAX-W will be the upcoming major iteration of its M3 model. The performance of these pure-play AI firms will be a key test of whether focused specialists can outperform integrated tech giants in China's rapidly evolving AI landscape.

This article is for informational purposes only and does not constitute investment advice.