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2026-09-28 11:09:57 CLSA released a research report stating that China's AI development cycle is shifting from technological breakthroughs toward scalable commercial returns. On the infrastructure side, supernodes are becoming the preferred architecture for trillion-parameter AI models, with scale-up extending from single servers to rack-level systems, creating a new investment cycle in AI networking, switching and system integration. At the application level, leading internet platforms are demonstrating to the market that AI investment and ROIC are no longer mutually exclusive. Cloud monetization, model upgrades, advertising efficiency and AI Agent deployment are beginning to contribute earnings visibility. CLSA believes the market is shifting from valuing AI purely based on innovation potential toward evaluating who can deploy at scale, monetize usage and sustain cash flow generation. The broker expects emerging winners to be companies controlling key AI infrastructure or possessing large user ecosystems capable of large-scale AI commercialization. The broker said AI monetization through cloud services, agents and advertising optimization is becoming increasingly evident, while model upgrades continue to narrow the gap with global peers. Earnings growth expectations are expected to accelerate in 2H26, supporting re-rating driven by AI execution and improving profitability. The broker's top pick is TENCENT (00700.HK), with a "High Conviction Outperform" rating, believing that Tencent's AI ToC commercialization path is becoming increasingly clear. Meanwhile, Alibaba possesses the most mature AI ToB commercialization model among China's internet platforms and received an "Outperform" rating. In addition, BIDU-W (09888.HK), BEKE-W (02423.HK), BILIBILI-W (09626.HK), JD-SW (09618.HK), KUAISHOU-W (01024.HK), MEITUAN-W (03690.HK), NTES (09999.HK), POP MART (09992.HK), TME-SW (01698.HK), TRIP.COM-S (09961.HK) and Z.AI (02513.HK) were also given "Outperform" ratings. (gc/u)~ AASTOCKS Financial News Website: www.aastocks.com This article was automatically translated by AI, the Chinese version should be considered the authoritative version. AASTOCKS.com Limited does not guarantee its accuracy or completeness and accepts no liability for any damages or losses arising from the use of this translation. | |