CMS International has released a research report stating that Z.AI (02513) recently announced the completion of a strategic financing round of approximately US$5 billion. The funds raised are primarily allocated toward the development of next-generation GLM foundational models, a fully self-training system, and computing infrastructure. The firm has maintained its "Buy" rating and a target price of HK$1,600.
According to a management meeting held on September 16, cited in the report, the recent capacity expansion has brought computing power to a meaningful scale, meaning short-term supply is no longer the main constraint on revenue growth. The company has signed revenue-sharing agreements with leading domestic and international cloud service providers, with related income starting to be recognized from October. The year-end ARR guidance has been raised from US$2.4 billion to US$3.0 billion, while the current all-business ARR (monthlyized) has reached US$1.8 billion, up from US$1.6 billion just two weeks earlier. Additionally, the first co-work scenario has generated cumulative orders exceeding RMB 1 billion within one month of launch.
The report notes that this funding round is anchored on computing infrastructure and a fully self-training system. Combined with the approximately RMB 28.5 billion in net cash held at the end of the first half of the year, Z.AI's computing power reserves have been significantly boosted. The newly added capacity could theoretically support over US$6 billion in inference revenue, though the actual outcome depends on utilization rates and discounting. In the first half of this year, the computing power multiplier increased 14-fold year-over-year. Since domestic chips were incorporated into the primary inference computing power earlier this year, the unit token inference cost has dropped by 80% from the start of the year.
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