JEFFERIES says Zhipu (02513.HK) 2026 year-end ARR guidance of US$2.4bn exceeds expectations but sustainability is questionable due to a high August base, uneven compute supply growth, concentrated customers and low switching costs. Zhipu Cloud gross margin improved in 1H2026 but JEFFERIES warns margins may retreat in 2H as new domestic GPU clusters come online and Coding Plan resumes. Target price trimmed to HK$1,183.79 from HK$1,299.80; rating maintained at RAISE. JEFFERIES raises Zhipu revenue

JEFFERIES says Zhipu (02513.HK) 2026 year-end ARR guidance of US$2.4bn exceeds expectations but sustainability is questionable due to a high August base, uneven compute supply growth, concentrated customers and low switching costs. Zhipu Cloud gross margin improved in 1H2026 but JEFFERIES warns margins may retreat in 2H as new domestic GPU clusters come online and Coding Plan resumes. Target price trimmed to HK$1,183.79 from HK$1,299.80; rating maintained at RAISE. JEFFERIES raises Zhipu revenue forecasts for 2026–2029 by 37%–119% reflecting faster cloud growth, and reduces net-loss forecasts by 14%–21%. In sum-of-the-parts valuation the cloud multiple is cut from 50x 2026 ARR to 30x to better align with overseas peers. JEFFERIES continues to view China’s large-language-model sector as crowded and favors full-stack cloud platforms with compute, data and monetization advantages such as Alibaba (09988.HK) and ByteDance.