Are Z.ai and MiniMax heading down opposite financial paths months after Hong Kong IPOs?

When two of China’s leading AI pioneers went public in Hong Kong in January, they pitched investors on a shared promise: capturing the explosive demand for artificial intelligence at home and abroad. Their first-half earnings, however, suggest that narrative could be splintering into two different trajectories. While Beijing-based Z.ai, also known as Zhipu AI, is winning over market analysts on the back of surging revenue and top-tier model performance, its Shanghai rival MiniMax is facing mounting scepticism over lagging technical benchmarks and questions about its growth projections. Z.ai on Monday reported a nearly 400 per cent year-on-year surge in first-half revenue to 953.9 million yuan (US$142 million). By contrast, MiniMax’s revenue grew 283 per cent to US$116.6 million, according to its financial report released last week. The commercial gap appeared even wider when measured by annual recurring revenue (ARR), a metric used by software companies to project 12-month revenue based on current monthly subscriptions. Z.ai co-founder and chief scientist Tang Jie said during an earnings call that the company’s ARR had reached US$1.6 billion based on August’s results. MiniMax founder and CEO Yan Junjie, meanwhile, said its ARR had reached US$800 million in August – half that of Z.ai. However, Yan later acknowledged in a private post-earnings call that MiniMax had calculated the figure by taking revenue from a single week in August and multiplying it by 52, according to a person familiar with the matter. Using that same method, Z.ai’s ARR would reach US$2 billion, Tang noted. Tilly Zhang, a technology and industrial policy analyst at Gavekal Dragonomics, described MiniMax’s maths as “creative”, suggesting the company might have highlighted a traffic peak following the July 31 launch of its flagship H3 video model. Doubts about MiniMax’s outlook have also been reinforced by model performance. On the Artificial Analysis Intelligence Index, MiniMax’s latest flagship M3 model scored 45, trailing both Z.ai’s GLM-5.3 and Chinese start-up Moonshot AI’s Kimi K3, which both scored 60. HSBC analysts including Ritchie Sun last week more than halved their price target for MiniMax from HK$760 (US$96.92) to HK$330, noting the company had to “invest more to stay competitive”. Also last week, JP Morgan analysts including Olivia Xu said MiniMax remained in “catch-up mode” when judged solely on model capabilities. Market sentiment, meanwhile, has warmed towards Z.ai. On Wednesday, CMB International analysts including He Saiyi raised their price target for Z.ai by 32 per cent to HK$1,985, citing an effective balance between model consistency, raw intelligence and task cost. On Tuesday, Macquarie analysts including Ellie Jiang highlighted Z.ai’s advanced capabilities and frontier positioning, although they slashed their target price by 21.5 per cent to HK$1,693, pointing to broader market volatility. HSBC analysts also cited competition as a significant risk to Z.ai, cutting its target price from HK1,500 to HK$1,375. In post-earnings trading, Z.ai shares fell 1.3 per cent in their first session since the results, closing at HK$1,099 on Thursday – 8 per cent below their pre-announcement close. MiniMax, meanwhile, rose 3.8 per cent in its first post-results session and ended Thursday at HK$354.60, gaining 17 per cent over the same period. Despite the broader divergence between the two companies, they continue to burn through substantial amounts of cash to fund model development and compute capacity. Z.ai’s research and development spending in the first half rose 33.6 per cent to 2.13 billion yuan. Its gross profit margin narrowed to 26.4 per cent from 50 per cent a year earlier, while its adjusted net loss widened 12.1 per cent to 1.96 billion yuan. MiniMax’s research and development expenses more than doubled to US$296.9 million as the firm sought to build an “independent and controllable” computing cluster partly using Chinese chips. While its gross margin improved to 17.9 per cent from 12.1 per cent, its adjusted net loss jumped 111.2 per cent to US$293 million. Beyond their rivalry, both firms face broader structural challenges. Revenue growth was constrained by “a very real compute shortage”, forcing both companies into aggressive data centre capital expenditure plans, Gavekal’s Zhang said. Bloomberg Intelligence analysts Robert Lea and Jasmine Lyu also warned recently that neither Z.ai nor MiniMax currently possessed the competitive edge or resources to compete head-to-head with Chinese tech giants like Tencent Holdings, ByteDance and Alibaba Group Holding, which owns the South China Morning Post. Still, Alex Liu, internet and media analyst at Bank of America Global Research, noted that both firms showed “meaningful commercial scale” and differentiated themselves through “faster execution, deeper focus and stronger product iteration”.

Are Z.ai and MiniMax heading down opposite financial paths months after Hong Kong IPOs?

.css-1c6uqr6{color:inherit;font-weight:inherit;font-size:inherit;font-family:inherit;line-height:inherit;overflow-wrap:break-word;}Post-earnings results suggest an emerging divide as differing revenue growth and model capabilities may shape their market standing, analysts say

Post-earnings results suggest an emerging divide as differing revenue growth and model capabilities may shape their market standing, analysts say