In its latest report, JPMorgan Chase stated:
1. While Zhipu's total revenue in the first half of the year fell short of expectations, this was mainly due to the shrinking on-premises deployment business; API revenue now accounts for 86.5%.
2. The API business is experiencing rapid growth: 1H revenue increased by 2736% year-on-year, August ARR reached $1.6 billion, and the year-end target is $2.4 billion.
3. Growth is driven by both usage and price: Token usage has increased more than 40 times this year, the average API price has increased by approximately 101%, and usage by paying users and large clients is also increasing rapidly.
4. AI inference efficiency has significantly improved: Unit token cost has decreased by approximately 80% this year, service performance on the same domestic hardware has improved by approximately 3 times, and API gross margin has risen to 24.6%.
5. The company is currently still in a high-R&D, high-loss phase, but JPMorgan Chase expects positive operating cash flow in 2027 and adjusted profitability in 2028. JPMorgan Chase maintains its "Overweight" rating, raising its target price from HK$1,800 (given on August 16) to HK$2,000. Key watchlist points include the sustainability of API growth, new application scenarios beyond coding, overseas commercialization, and the capabilities and costs of next-generation GLM.
(These views are from JPMorgan Chase's September 1 report.)
