Country Daily
China Economic Activity / China AI / CATL / Mobvista Inc
Analyst
Key Indices
Top Stories
Economics | Economic Activity
August’s data was mixed and mildly negative for markets. Industrial production growth accelerated to 5.2% yoy (+0.7ppt mom), beating Bloomberg consensus of 4.8%, with external demand remaining a key driver. Domestic demand remained weak: retail sales growth slowed to 0.4% yoy, below consensus of 0.8%, while FAI contracted 7.2% ytd yoy, dragged by a 19.9% ytd yoy decline in property FAI. Unemployment edged up to 5.3%. Going forward, faster project implementation could help narrow the FAI contraction.
Sector Update | China AI
AI model competition is broadening from capability to efficiency, monetisation and global adoption, with cybersecurity emerging as a high-value AI use case. DeepSeek V4.1 Flash highlights lower compute requirements and more dynamic pricing, while MiniMax expands overseas through deeper model adoption. Funding intensity remains high as Z.AI moves upstream into compute infrastructure, while potential IPOs could weigh on sector liquidity. Maintain MARKET WEIGHT. Top BUYs: Z.AI and Alibaba.
Company Update | CATL (300750 CH/BUY/Rmb316.36/Target: Rmb585.00)
CATL’s installations continue to outgrow the market. Order flows remain strong, and capacity utilisation remains tight through year-end. The Hungary plant launch is delayed to at least 1Q27, but other plants can cover the shortfall. Fears that OEMs will switch away from CATL are groundless, due to its moats in technology, reliability and brand equity. Maintain BUY and keep the target prices for A-share/H-share at Rmb585.00/HK$675.00.
Small/Mid Cap Highlights | Mobvista Inc (1860 HK/NOT RATED/HK$10.70)
Mobvista is an ad-tech platform with a 28% revenue four-year CAGR in 2021-25. Its new AI infrastructure launch in Oct 26 should significantly improve its model capabilities (with initial tests suggesting close to 100-fold overall efficiency improvement) and strengthen its competitiveness for hybrid-monetisation games. The board approved a new share repurchase plan of up to HK$300m open-market repurchases on the back of its strong net cash position. The company is trading at 22.7x/13.4x PE in 2026-27, based on Bloomberg consensus.
Top Stories
Economics | Economic Activity
August’s data was mixed and mildly negative for markets. Industrial production growth accelerated to 5.2% yoy (+0.7ppt mom), beating Bloomberg consensus of 4.8%, with external demand remaining a key driver. Domestic demand remained weak: retail sales growth slowed to 0.4% yoy, below consensus of 0.8%, while FAI contracted 7.2% ytd yoy, dragged by a 19.9% ytd yoy decline in property FAI. Unemployment edged up to 5.3%. Going forward, faster project implementation could help narrow the FAI contraction.
Sector Update | China AI
AI model competition is broadening from capability to efficiency, monetisation and global adoption, with cybersecurity emerging as a high-value AI use case. DeepSeek V4.1 Flash highlights lower compute requirements and more dynamic pricing, while MiniMax expands overseas through deeper model adoption. Funding intensity remains high as Z.AI moves upstream into compute infrastructure, while potential IPOs could weigh on sector liquidity. Maintain MARKET WEIGHT. Top BUYs: Z.AI and Alibaba.
Company Update | CATL (300750 CH/BUY/Rmb316.36/Target: Rmb585.00)
CATL’s installations continue to outgrow the market. Order flows remain strong, and capacity utilisation remains tight through year-end. The Hungary plant launch is delayed to at least 1Q27, but other plants can cover the shortfall. Fears that OEMs will switch away from CATL are groundless, due to its moats in technology, reliability and brand equity. Maintain BUY and keep the target prices for A-share/H-share at Rmb585.00/HK$675.00.
Small/Mid Cap Highlights | Mobvista Inc (1860 HK/NOT RATED/HK$10.70)
Mobvista is an ad-tech platform with a 28% revenue four-year CAGR in 2021-25. Its new AI infrastructure launch in Oct 26 should significantly improve its model capabilities (with initial tests suggesting close to 100-fold overall efficiency improvement) and strengthen its competitiveness for hybrid-monetisation games. The board approved a new share repurchase plan of up to HK$300m open-market repurchases on the back of its strong net cash position. The company is trading at 22.7x/13.4x PE in 2026-27, based on Bloomberg consensus.
Analyst
Key Indices
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