12 Hong Kong AI Stocks to Watch: Top Picks & Investment Insights

Name	Why Selected as AI-related Stock
Baidu Group	- Comprehensive AI technology layout (chips, frameworks, NLP, knowledge graphs). - Large-scale AI applications (search, cloud, autonomous driving). - Leading AI R&D strength. - Active AI commercialization.
Alibaba	- Large-scale investment in AI R&D. - AI-driven business strategy. - Synergy between cloud computing and AI. - Rapid growth of AI product revenue. - Comprehensive AI ecosystem.
Tencent Holdings	- Large-scale AI R&D investment. - Wide application of AI in existing businesses. - AI infrastructure construction. - AI ecosystem construction.
Xiaomi Group	- Significant AI strategic investment. - Self-developed large language model (MiLM). - Development of AI operating system (HyperOS). - Wide application of AI in products.
Meitu Inc.	- Core business highly dependent on AI. - Heavy investment in AI, including own large model. - AI deeply integrated into business model. - Driving rapid growth in subscription revenue with AI.
Zhihu	- Continuous investment and innovation in AI. - Developed own large language model ("Zhihaitu AI"). - Launched several AI-based products and features. - AI used to enhance user experience and optimize content distribution.
NetEase	- Continuous investment and innovation in AI R&D. - Wide application of AI in core businesses (gaming, education, music). - Established an Artificial Intelligence Business Division. - Breakthroughs in AI large models, intelligent customer service, and gaming AI.
Trip.com Group	- Developed "Trip.com WenDao" vertical large model and "TripGenie" AI assistant. - Uses AI to optimize products and services. - Applies AI to improve operational efficiency. - AI considered a core long-term strategy.
SenseTime Group Inc.	- Leading global AI platform company focused on computer vision and deep learning. - Developed world's top deep learning platform and supercomputing center. - Launched leading AI technologies. - First "Intelligent Vision" National AI Open Innovation Platform.
Mobvista	- Core business relies heavily on deep application of AI. - Mintegral platform uses machine learning and algorithm optimization. - Utilizes AI-driven tool matrices in MarTech. - Technological innovations give it an advantage in AI marketing.
Kingsoft Cloud	- Provides cloud infrastructure and services supporting AI development. - Continuous investment in AI technology. - Provides resources for AI companies. - Actively lays out cutting-edge AI fields.
GDS Holdings	- Provides key infrastructure support for AI applications as a data center operator. - High demand for data centers due to AI growth. - Actively applies AI to data center operation and management.

Hong Kong's artificial intelligence-related stocks have recently shown positive trends. As AI technology rapidly develops and expands its applications globally, AI concept stocks in the Hong Kong market have attracted investors' attention.

In the Hong Kong stock market, shares of several companies related to AI technology have performed strongly. Stocks of companies such as SenseTime, Xiaomi Group, Alibaba, and Tencent Holdings have garnered investor interest. These companies have varying degrees of involvement and investment in the AI field, which has driven their stock prices upward.

SenseTime, a company focused on computer vision and deep learning, has shown particularly impressive stock performance. The company's AI large model system "SenseNova" includes multiple AI applications, such as "SenseChat" (similar to ChatGPT) and the text-to-image creation tool "SenseMirage". These innovative products and services have boosted investor confidence in the company's future development.

Xiaomi Group's AI applications in the smart home sector have also attracted attention. The company has not only developed the smart voice assistant "Xiao AI" but also widely applied AI technology in smart home devices, such as facial recognition and object detection features. Xiaomi has also announced plans to invest up to 100 billion yuan in AI, robotics, and autonomous driving technology research and development over the next five years, further bolstering investor confidence.

As Chinese internet giants, Alibaba and Tencent have also increased their investments in the AI field. Alibaba's AI chatbot "Tongyi Qianwen" and Tencent's large language model "Hunyuan" demonstrate these two companies' strengths in AI technology, supporting their stock performance.

Additionally, companies focused on specific AI application areas, such as Meitu (specializing in AI image processing) and Kuaishou Technology (applying AI technology in the short video sector), have also shown upward trends in their stock prices. This reflects the market's optimism about the prospects of AI technology applications in various niche areas.

Overall, AI-related stocks in the Hong Kong stock market are trending positively, reflecting investors' optimistic expectations for the development prospects of AI technology. However, investors should also note that the AI industry still faces challenges such as technological bottlenecks, talent shortages, and regulatory policies, which may affect the short-term fluctuations of related stocks. Therefore, when investing in AI concept stocks, it is necessary to comprehensively consider factors such as the company's technological strength, market position, and long-term development strategy to make informed investment decisions.

Baidu Group

Why it's considered an AI-related stock

Baidu Group is considered an AI-related stock primarily due to:

1. Comprehensive AI Technology Layout: Baidu possesses a complete AI technology stack, including AI chips, deep learning frameworks, natural language processing, knowledge graphs, and other core AI capabilities.
2. Large-scale AI Applications: The company widely applies AI technology in multiple fields such as search engines, smart cloud, and autonomous driving.
3. Leading AI R&D Strength: Baidu continuously invests heavily in AI research and development, with its R&D expense ratio leading the industry.
4. AI Commercialization Progress: The company actively promotes the commercial application of AI technology in various business lines, such as smart cloud and intelligent driving.

Company Overview

Baidu Group, founded in 2000, started as a search engine company. It began focusing on AI in 2010 and gradually transformed into a technology company with AI at its core. Currently, Baidu's business is divided into two main segments: Baidu Core (including mobile ecosystem, AI Cloud, intelligent driving, etc.) and iQIYI. The company is dual-listed on NASDAQ and the Hong Kong Stock Exchange.

Key Technologies/Products/Services

1. Baidu Brain: The company's core AI technology engine, providing AI capability support for various business lines.
2. ERNIE Large Model: Baidu's self-developed large-scale language model, an important part of the company's AI strategy.
3. Baidu AI Cloud: Provides AI cloud services and solutions, including PaaS, SaaS, and IaaS.
4. Apollo Autonomous Driving Platform: An open autonomous driving technology platform, including high-precision maps, automated valet parking, and other functions.
5. DuerOS Smart Assistant: An AI-driven smart voice assistant system.
6. Baidu Search and Feed: The company's core business, continuously integrating AI technology to enhance user experience.

Market Position

1. Search Engine: Baidu is the largest search engine in China, dominating the domestic market.
2. AI Cloud Services: Baidu AI Cloud has ranked first in China's AI public cloud service market for several years, with a market share of 26.4% in 2023.
3. Intelligent Driving: The Apollo platform is a leader in the field of autonomous driving, collaborating with many automakers.
4. Large Language Model: ERNIE Large Model is one of the leading large-scale language models in China, applied in multiple industries.

Financial Performance

• Key Metrics

  • Q2 2024 Total Revenue: 33.9 billion yuan
  • Q2 2024 Adjusted Net Income Attributable to Baidu: 7.4 billion yuan
  • Adjusted Net Income Margin: 22%

• Revenue Trend Baidu's revenue growth has slowed down recently, with total revenue in Q2 2024 decreasing by 0.5% year-over-year. However, the company's core business revenue still maintained slight growth, increasing by 1% year-over-year.

• Profitability Despite macroeconomic pressures, Baidu maintains strong profitability. In Q2 2024, the adjusted net income margin of Baidu's core business reached 26%, demonstrating good cost control capabilities.

Future Outlook and Challenges

Outlook:

1. Continuous innovation and application of AI technology will bring new growth opportunities to Baidu, especially in areas like smart cloud and intelligent driving.
2. The commercial application of large language models is expected to bring new revenue growth points to the company.
3. The deep integration of AI technology with traditional businesses will help enhance the company's overall competitiveness.

Challenges:

1. Macroeconomic uncertainty may affect advertising revenue and corporate IT spending, putting pressure on the company's short-term performance.
2. Competition in the AI field is increasingly fierce, and Baidu needs to maintain its technological leadership.
3. Changes in the regulatory environment may affect some of the company's businesses.
4. Large-scale AI R&D investment may affect the company's profitability in the short term.

Alibaba

Why it's considered an AI-related stock

Alibaba is considered an AI-related stock primarily due to:

1. Large-scale investment in AI technology R&D: The company continues to increase its investment in AI infrastructure and technology, including the development of large language models.
2. AI-driven business strategy: Alibaba has adopted "user-first, AI-driven" as its core development strategy, applying AI technology to various business segments.
3. Synergy between cloud computing and AI: Alibaba Cloud, as an important business segment of the company, provides strong infrastructure support for AI applications.
4. Rapid growth of AI product revenue: The company's AI-related product revenue continues to maintain triple-digit growth, showing strong market demand.
5. Comprehensive layout of the AI ecosystem: By investing in AI startups and open-source models, Alibaba is building a complete AI ecosystem.

Company Overview

Alibaba is a leading Chinese technology company with major businesses including e-commerce, cloud computing, digital media, and entertainment. Founded in 1999 and headquartered in Hangzhou, the company is listed on the New York Stock Exchange and the Hong Kong Stock Exchange. Alibaba owns several well-known brands, such as Taobao, Tmall, and Alibaba Cloud, serving consumers, merchants, and enterprises worldwide.

Key Technologies/Products/Services

1. Tongyi Qianwen: Alibaba's self-developed large language model capable of handling various tasks.
2. Alibaba Cloud: Provides comprehensive cloud computing services, including AI platforms and solutions.
3. AI application in e-commerce platforms: Application of AI technology on platforms such as Taobao and Tmall to optimize user experience and merchant operations.
4. AI customer service: Development of intelligent customer service systems to improve customer service efficiency.
5. Smart logistics: Using AI technology to optimize the logistics operations of Cainiao Network.

Market Position

Alibaba occupies a leading position in China's e-commerce market and also has significant influence in the global cloud computing market. In the AI field, the company is rapidly increasing its market position through continuous investment and technological innovation:

1. E-commerce: Taobao and Tmall continue to maintain their market leadership.
2. Cloud computing: Alibaba Cloud is the largest public cloud provider in China and ranks among the top globally.
3. AI technology: AI models such as Tongyi Qianwen have reached internationally leading levels in terms of performance.
4. International markets: Continuously expanding global market share through platforms such as Lazada and AliExpress.

Financial Performance

• Key Metrics

  • Q2 FY2025 Revenue: 236.503 billion yuan
  • Net Income: 43.547 billion yuan
  • AI-related product revenue growth: Triple-digit growth

• Revenue Trend

  • Overall revenue maintains steady growth, with a year-over-year increase of 5% in Q2 FY2025.
  • Cloud Intelligence Group revenue increased by 6%, reaching 26.549 billion yuan.
  • International commerce revenue grew strongly, with a year-over-year increase of 32%.

• Profitability

  • Net income increased by 63% year-over-year, showing good profitability.
  • Adjusted EBITA (non-GAAP) decreased by 5% year-over-year, mainly due to increased investment in the e-commerce business.

Future Outlook and Challenges

Outlook:

1. Continuous AI technology innovation: The company will continue to invest in AI technology to enhance its products and services.
2. Growth of cloud computing business: Public cloud and AI-related businesses are expected to maintain rapid growth.
3. International market expansion: Further expansion into global markets through cross-border e-commerce platforms.
4. Industrial digitalization: Using AI and cloud technology to help more industries achieve digital transformation.
5. Ecosystem construction: Building a more open and diverse AI ecosystem through investment and cooperation.

Challenges:

1. Intense market competition: Facing competitive pressure from domestic and foreign tech giants.
2. Regulatory environment changes: Need to adapt to evolving domestic and international regulatory policies.
3. Return on technology investment: The commercialization and profitability of large-scale AI investments still need time to be verified.
4. Talent competition: Facing challenges in attracting and retaining top AI talent.
5. Global economic uncertainty: May affect corporate IT spending and consumer behavior.

Tencent Holdings

Why it's considered an AI-related stock

Tencent Holdings is considered an AI-related stock primarily due to:

1. Large-scale AI R&D investment: Tencent continues to increase its R&D investment in AI technology, including the development of its own large language model, "Hunyuan."
2. Wide application of AI technology in existing businesses: Tencent integrates AI technology into its core businesses such as social media, gaming, and advertising to enhance user experience and operational efficiency.
3. AI infrastructure construction: The company invests in building large-scale AI computing clusters and cloud computing infrastructure to support the development of AI technology.
4. AI ecosystem construction: Through open platforms and investments, Tencent actively builds an AI ecosystem to promote the application of AI technology in various industries.

Company Overview

Tencent Holdings is a leading Chinese internet technology company founded in 1998 and headquartered in Shenzhen. The company's main businesses include social networking, digital content, fintech, cloud computing, and artificial intelligence. Tencent owns popular social platforms such as WeChat and QQ, as well as a wealth of digital content services such as games, music, and video.

Key Technologies/Products/Services

1. Social platforms: WeChat, QQ
2. Digital content: Tencent Games, Tencent Video, QQ Music
3. Fintech: WeChat Pay, Tencent Licaitong
4. Cloud computing: Tencent Cloud
5. Artificial intelligence: Hunyuan large model, AI open platform
6. Enterprise services: WeCom, Tencent Meeting

Market Position

Tencent occupies a leading position in China's internet industry, especially in social media, gaming, and digital payments. The company's WeChat and QQ platforms have over 1 billion monthly active users and hold a significant share of the global social media market. In the gaming industry, Tencent is one of the largest gaming companies in the world. Although the company started relatively late in cloud computing and AI, it has developed rapidly and become one of the major players in the Chinese market.

Financial Performance

• Key Metrics

  • 2023 Total Revenue: Approximately 554.5 billion yuan
  • 2023 Net Income: Approximately 188.1 billion yuan
  • 2023 R&D Expenditure: Approximately 62.4 billion yuan

• Revenue Trend Tencent's revenue has maintained steady growth in the past few years, although the growth rate has slowed down. Revenue in 2023 increased by about 10% year-over-year, mainly driven by the growth of gaming, advertising, and fintech businesses.

• Profitability The company maintains strong profitability, with a net profit margin of about 34% in 2023. Tencent optimizes its cost structure and improves operational efficiency to maintain stable profit growth despite slowing revenue growth.

Future Outlook and Challenges

Outlook:

1. Deep application of AI technology: Tencent will continue to deepen the application of AI in its core businesses to enhance user experience and operational efficiency.
2. Growth of cloud computing and enterprise services: With the acceleration of digital transformation, Tencent is expected to gain more market share in these areas.
3. International expansion: Especially in gaming and cloud services, Tencent will continue to pursue a globalization strategy.
4. Exploration of emerging technologies: Including the layout in areas such as the metaverse and blockchain.

Challenges:

1. Regulatory environment: Facing increasingly strict regulatory pressures from both domestic and international sources, especially in data security and market competition.
2. Market competition: Facing fierce competition from domestic and foreign tech giants in emerging fields such as AI and cloud computing.
3. Innovation pressure: Need to continuously innovate to maintain market leadership, especially in a rapidly changing technological environment.
4. International geopolitical risks: Globalization expansion faces potential political and regulatory obstacles.

Xiaomi Group

Why it's considered an AI-related stock

Xiaomi Group is considered an AI-related stock mainly due to:

1. AI Strategic Investment: Xiaomi plans to invest over 100 billion yuan in R&D between 2022 and 2026, focusing on core technologies such as AI, operating systems, and chips.
2. Self-developed Large Language Model: Xiaomi has developed the MiLM large language model and has deployed AI capabilities in multiple technology areas, including vision, speech, and natural language processing.
3. AI Operating System: Xiaomi is developing the AI-based operating system Xiaomi HyperOS, aiming to provide an intelligent experience for its ecosystem products.
4. Application of AI in Products: Xiaomi is integrating AI technology into its smartphones, smart home devices, and cars to enhance user experience.

Company Overview

Xiaomi Group is a consumer electronics and smart manufacturing company with smartphones, smart hardware, and an IoT platform at its core. Founded in 2010, Xiaomi has become one of the world's leading smartphone brands and is rapidly expanding in areas such as smart home, wearable devices, and smart electric vehicles. The company adopts a "hardware + new retail + internet services" business model and is committed to providing high-quality, cost-effective products to global users through technological innovation.

Key Technologies/Products/Services

1. Smartphones: As its core business, Xiaomi continues to launch innovative smartphone products.
2. AIoT Ecosystem: Includes smart home devices, wearable devices, etc., building an all-scenario smart life.
3. MIUI/HyperOS Operating System: Self-developed operating system, integrating AI capabilities to provide an intelligent user experience.
4. MiLM Large Language Model: Self-developed AI model to enhance product intelligence and user interaction experience.
5. Smart Electric Vehicles: Emerging business, applying AI technology to the automotive field, such as intelligent driving assistance systems.
6. Internet Services: Including advertising, games, financial services, etc., which are important sources of revenue and profit.

Market Position

• Smartphone Market: Ranked third globally in shipments, with a market share of approximately 13.8%.
• IoT Devices: One of the world's largest consumer-grade IoT platforms, with over 860 million connected devices.
• China Market: Holds a leading position in multiple smart hardware categories.
• Overseas Markets: Strong performance in emerging markets such as India and Southeast Asia.

Financial Performance

• Key Metrics

  • Q3 2024 Total Revenue: 92.5 billion yuan
  • Adjusted Net Income: 6.3 billion yuan
  • R&D Investment: Over 6 billion yuan, up nearly 20% year-over-year
  • Cash Reserves: 151.6 billion yuan

• Revenue Trend

  • High-speed growth for three consecutive quarters, with a year-over-year increase of 30.5% in Q3 2024.
  • Smartphones, IoT and lifestyle products, internet services, and smart electric vehicle businesses all showed growth.

• Profitability

  • Gross margin continues to improve, with an overall gross margin of 21.8% in Q3 2024.
  • Internet services business has a gross margin of up to 77.5%, which is the main source of profit.
  • Smart electric vehicle business has a gross margin of 17.1%, showing good development potential.

Future Outlook and Challenges

Outlook:

1. Deep Integration of AI Technology: Further integrate AI technology into products and services to enhance user experience and product competitiveness.
2. Globalization Expansion: Continue to expand overseas markets, especially in Europe and Latin America.
3. Breakthrough in the High-end Market: Enhance share in the high-end market through technological innovation and brand building.
4. Development of Smart Electric Vehicle Business: Continuous investment and innovation to become a major player in the new energy vehicle market.
5. Expansion of AIoT Ecosystem: Further enrich the smart home product line and strengthen the ecosystem advantage.

Challenges:

1. Pressure on Technological Innovation: Requires continuous high investment in AI, chips, and other fields to maintain competitiveness.
2. Intensified Market Competition: The smartphone and IoT markets are increasingly competitive, with pressure on profit margins.
3. Global Economic Uncertainty: Geopolitical risks and economic fluctuations may affect consumer demand.
4. Regulatory Risks: Regulatory policies on data privacy, antitrust, etc., may pose challenges.
5. Supply Chain Management: Need to effectively address global supply chain fluctuations and chip shortages.

Meitu Inc.

Why it's considered an AI-related stock

Meitu Inc. is considered an AI-related stock mainly because its core business and technological development are highly dependent on AI technology. The company uses artificial intelligence as a core driver, widely applying it in its image processing, video editing, and design tools. Meitu is not only making achievements in AI applications but also investing heavily in developing its own AI large model. It deeply integrates AI technology into its business model, driving rapid growth in subscription revenue.

Company Overview

Meitu Inc. was established in 2008 and is headquartered in Xiamen, China. With "beauty" as its core, the company is committed to creating excellent image and design products. Meitu was listed on the Main Board of the Hong Kong Stock Exchange in 2016 (stock code: 1357.HK). The company's main businesses include image and design products, advertising services, and beauty industry solutions. In recent years, Meitu has actively transformed into an AI-driven technology company, focusing on the development of AI-based productivity tools.

Key Technologies/Products/Services

• MiracleVision: The company's self-developed AI vision large model, providing underlying AI capabilities for various products.
• Image Processing Products: Meitu Xiuxiu, BeautyCam, Wink, etc.
• AI Design Tools: Meitu Design Studio, WIDE, etc.
• AI Video Creation: MOKI (AI short video creation tool)
• Commercial AI Solutions: Meitu AI Photo, PicMa (game advertising AI creation and delivery platform), etc.
• Beauty Industry SaaS Services: Providing digital solutions for beauty industry customers.

Market Position

Meitu is a leader in image processing and social networking, especially in China and Asian markets. As of June 2024, Meitu had 258 million monthly active users globally, with 32.9% of users from overseas. The company has a strong brand influence and user base in the field of AI image processing and design tools. In the emerging AI productivity tool market, Meitu is actively deploying and has achieved initial success.

Financial Performance

• Key Metrics

  • H1 2024 Total Revenue: 1.62 billion yuan
  • Adjusted Net Income: 270 million yuan
  • Paying Subscribers: Over 10.81 million

• Revenue Trend

  • H1 2024 total revenue increased by 28.6% year-over-year.
  • Image and design product revenue (mainly subscription revenue) increased by 54.5% year-over-year, accounting for 57.4% of total revenue.
  • Advertising business revenue increased by 18.3% year-over-year.

• Profitability

  • H1 2024 adjusted net income increased by 80.3% year-over-year.
  • Gross margin continues to improve, mainly due to the increased proportion of high-margin subscription business.

Future Outlook and Challenges

Outlook:

• Continuous iteration of AI technology is expected to further enhance product competitiveness and user stickiness.
• Internationalization strategy is advancing, with great growth potential in overseas markets.
• The productivity tool track has broad prospects and is expected to become a new growth point.
• The SaaS business model is gradually maturing, providing a guarantee for long-term stable revenue.

Challenges:

• The AI technology competition is fierce, requiring continuous large-scale R&D investment to maintain technological leadership.
• User growth is slowing down, requiring exploration of new user acquisition and monetization methods.
• Internationalization faces cultural differences and competitive pressures in different markets.
• Need to balance short-term profitability and long-term technology investment.

Zhihu

Why it's considered an AI-related stock

Zhihu is considered an AI-related stock mainly due to its continuous investment and innovation in the AI field. The company has not only developed its own large language model, "Zhihaitu AI," but also launched several AI-based products and features, such as "Zhihu Zhidah" and "Discovery · AI Search." These AI-driven services aim to enhance user experience, optimize content distribution, and empower Zhihu's core Q&A community.

Company Overview

Zhihu is a leading online content community in China, established on January 26, 2011. The company primarily uses a question-and-answer format to provide a platform for users to share and acquire knowledge. Zhihu was listed on the New York Stock Exchange in 2021 (stock code: ZH) and completed a secondary listing on the Hong Kong Stock Exchange in 2022 (stock code: 2390). As of Q3 2024, Zhihu had 81.1 million monthly active users and 16.5 million monthly paying members.

Key Technologies/Products/Services

1. Zhihaitu AI: Zhihu's self-developed large language model with hundreds of billions of parameters, focusing on improving logical reasoning ability and reasoning speed.
2. Zhihu Zhidah: An AI-based search and Q&A tool that can provide both concise and in-depth answers, supporting content and people search.
3. Discovery · AI Search: An AI feature that integrates search, real-time Q&A, and follow-up questions, aiming to provide more accurate content recommendations.
4. Paid Membership Service: A membership system that provides high-quality content and value-added services.
5. Marketing Services: Provides community-based marketing solutions for advertisers.
6. Vocational Training: Provides online vocational education and skills training courses.

Market Position

Zhihu is the largest online Q&A community in China and occupies a leading position in the field of knowledge sharing and professional content. In the field of AI search and Q&A, the rapid growth of Zhihu Zhidah demonstrates the company's competitiveness in this emerging market. However, Zhihu faces fierce competition from other content platforms and AI companies.

Financial Performance

• Key Metrics

  • Q3 2024 Revenue: 845 million yuan
  • Net Loss: 9 million yuan
  • Gross Margin: 63.9%

• Revenue Trend Zhihu's revenue has shown a downward trend in recent quarters. Q3 2024 revenue decreased by 17.3% year-over-year, with major business lines including paid membership, marketing services, and vocational training experiencing varying degrees of decline.

• Profitability Despite the decline in revenue, Zhihu's profitability has improved. The net loss in Q3 2024 narrowed significantly by 96.8% year-over-year, marking the largest reduction in quarterly losses since its IPO. The company is improving its profitability by optimizing its cost structure and improving operational efficiency.

Future Outlook and Challenges

Outlook:

1. The continuous application of AI technology is expected to enhance user experience and content quality, thereby increasing platform stickiness.
2. The rapid growth of AI products such as Zhihu Zhidah has opened up new development directions and potential revenue sources for the company.
3. The company is exploring more applications of AI technology in content creation, recommendation systems, and commercialization.

Challenges:

1. The downward trend in revenue needs to be reversed, especially in core businesses such as marketing services.
2. Facing fierce market competition, Zhihu needs to continuously innovate to maintain user growth and engagement.
3. Balancing AI investment with short-term financial performance requires precise strategic execution.
4. Exploring more diversified business models while maintaining content quality and community atmosphere.

NetEase

Why it's considered an AI-related stock

NetEase is considered an AI-related stock mainly because of its continuous investment and innovation in AI technology research and development and application. The company not only widely applies AI technology in its core businesses such as gaming, education, and music but also established an Artificial Intelligence Business Division dedicated to research and application in AI fields such as deep learning, speech and audio, and computer vision. NetEase's breakthroughs in AI large models, intelligent customer service, and gaming AI make it an important force in China's AI technology innovation.

Company Overview

Founded in 1997, NetEase is a leading internet technology company in China with businesses covering online games, education, music, e-commerce, and other fields. The company was listed on NASDAQ in 2000 and completed a secondary listing in Hong Kong in 2020. With the philosophy of "ingenuity and innovation," NetEase continues to change lives through technological innovation. The company has approximately 21,000 employees, with offices in multiple cities in China and branches in multiple countries around the world.

Key Technologies/Products/Services

1. Gaming AI: Application of AI technology in games such as "Justice Online" to enhance the gaming experience.
2. Education AI: Youdao launched the "Ziyue" education large model, applied in multiple educational scenarios.
3. Music AI: NetEase Cloud Music launched an AI singing tool to support UGC content creation.
4. Industrial AI: Development of NetEase's Agile Engineering Robot with efficient autonomous operation capabilities.
5. Intelligent Customer Service: Qiyu intelligent customer service system, integrating NLP and deep learning technologies.
6. AI Open Platform: Providing open platforms such as NetEase Smart+ to support AI technology applications.

Market Position

NetEase occupies a leading position in China's internet industry, especially in gaming, education, and music. In the gaming market, NetEase is one of the top seven gaming companies in the world and ranks second in China's mobile game market share. Youdao is developing rapidly in the online education field, and NetEase Cloud Music is a leading online music platform in China. In terms of AI technology applications, NetEase has outstanding performance in multiple segments, such as ranking first in the intelligent customer service market share.

Financial Performance

• Key Metrics

  • Q3 2024 Net Revenue: 26.2 billion yuan
  • Games and Related Value-added Services Net Revenue: 20.9 billion yuan
  • Youdao Net Revenue: 1.6 billion yuan
  • NetEase Cloud Music Net Revenue: 2.0 billion yuan

• Revenue Trend NetEase's overall revenue maintains steady growth, although it decreased slightly (-3.9%) year-over-year in Q3 2024, with different performances in various business segments. The gaming business, as the main source of revenue, remained relatively stable, while the education and music businesses showed growth.

• Profitability The company maintains a high overall gross margin level, with a gross margin of 62.9% in Q3 2024. NetEase continues to increase R&D investment, with a cumulative R&D investment of over 12 billion yuan in the first three quarters of 2024 to support the development of cutting-edge technologies such as AI.

Future Outlook and Challenges

Outlook:

1. Deep Integration of AI Technology: NetEase will continue to deepen the application of AI technology in its core businesses such as gaming, education, and music to enhance user experience and operational efficiency.
2. Globalization Expansion: The company is actively expanding into overseas markets, especially in the gaming field.
3. Development of Innovative Businesses: NetEase will continue to explore the application of AI in new fields, such as industrial intelligence.

Challenges:

1. Technology Competition: The AI field is highly competitive and requires continuous large-scale investment to maintain technological leadership.
2. Regulatory Risks: Policy uncertainties faced by the gaming industry may affect business development.
3. Talent Competition: AI talent is scarce, and attracting and retaining high-end talent is a key challenge.
4. Global Economic Uncertainty: May affect user spending and advertiser investment.

NetEase is addressing these challenges through continuous innovation and a diversified strategy, striving to maintain its competitive advantage in the new AI-driven era.

Trip.com Group

Why it's considered an AI-related stock

Trip.com Group actively invests in and applies artificial intelligence technology, integrating AI into its core businesses:

1. Developed the "Trip.com WenDao" vertical large model for the travel industry and the AI travel assistant "TripGenie."
2. Utilizes AI to optimize products and services, including user inspiration, travel guides, itinerary planning, and after-sales service.
3. Applies AI to improve operational efficiency, such as the intelligent customer service system significantly increasing the self-service problem resolution rate.
4. Continues to increase AI R&D investment, considering it a core long-term strategy.

Company Overview

Trip.com Group, founded in 1999, is a leading global one-stop travel service provider. The company provides comprehensive travel services such as accommodation reservations, transportation ticketing, vacation packages, and corporate travel management. Trip.com was listed on NASDAQ in 2003 and completed a secondary listing on the Hong Kong Stock Exchange in 2021. The company operates in both domestic and international markets and owns several well-known brands such as Ctrip, Qunar, Trip.com, and Skyscanner.

Key Technologies/Products/Services

1. AI Travel Assistant TripGenie: Provides personalized itinerary planning and instant booking services.
2. Vertical Large Model for Travel "Trip.com WenDao": Provides users with accurate travel data and advice.
3. Intelligent Customer Service System: Improves self-service problem resolution rate and reduces the need for manual customer service.
4. One-stop Travel Service Platform: Integrates resources from over 1.7 million hotels and more than 600 airlines worldwide.
5. International OTA Platform Trip.com: Focuses on online travel services in overseas markets.

Market Position

Trip.com is a leader in China's online travel market and also has significant global influence:

1. Global Gross Merchandise Volume (GMV) reached $160 billion in 2023, surpassing Booking to become the world's largest.
2. The international OTA platform Trip.com operates in 39 countries and regions, with rapid revenue growth.
3. Dominates the high-end travel market in China.
4. Outbound travel business recovery is faster than the industry average.

Financial Performance

• Key Metrics

  • Q1 2024 net revenue of 11.9 billion yuan, up 29% YoY
  • 2023 full-year net revenue of 44.7 billion yuan, up 122% YoY
  • 2023 net income of 8.1 billion yuan, turning a loss into a profit

• Revenue Trend

  • Steady growth in domestic business, with Q1 2024 accommodation reservation revenue up 29% YoY
  • Rapid growth in international business, with Trip.com platform revenue up about 80% YoY in Q1 2024
  • Fast recovery of outbound travel business, with outbound hotel and air ticket bookings in Q1 2024 recovering to 120% of the 2019 level

• Profitability

  • Gross margin remains high at around 80%
  • Continuous improvement in operating efficiency, with adjusted EBITDA margin reaching 29% in 2023
  • High R&D investment ratio, with R&D expenses accounting for 27% of net revenue in 2023

Future Outlook and Challenges

Outlook:

1. Continue to increase investment in AI technology to enhance user experience and operational efficiency.
2. Accelerate international expansion, especially in the Asia-Pacific region.
3. Deepen high-end and customized travel services to capture the consumption upgrade trend.
4. Develop sustainable tourism to respond to global environmental trends.

Challenges:

1. Global economic uncertainty may affect travel demand.
2. Changes in international political situations may affect cross-border travel business.
3. Competition from local competitors in various regional markets.
4. Increased pressure on data security and privacy protection.
5. Need to balance high R&D investment with short-term profitability.

SenseTime Group Inc.

Why it's considered an AI-related stock

SenseTime is a leading global artificial intelligence platform company focused on computer vision and deep learning original technologies. The company has independently developed and established the world's top deep learning platform and supercomputing center, launching a series of leading artificial intelligence technologies, including facial recognition, image recognition, text recognition, medical image recognition, video analysis, autonomous driving, and remote sensing. As the first "Intelligent Vision" National New Generation Artificial Intelligence Open Innovation Platform designated by the Ministry of Science and Technology of China, SenseTime's technological innovation and application implementation in the AI field make it a representative company among AI-related stocks.

Company Overview

SenseTime was established on October 15, 2014, and is headquartered in Hong Kong, with branches in Beijing, Shanghai, Shenzhen, and other cities. With the mission and vision of "Adhering to Originality, Let AI Lead Human Progress," the company is committed to promoting the innovation and application of artificial intelligence technology. SenseTime has established partnerships with more than 3,500 well-known enterprises and institutions at home and abroad, and its business covers smart phones, internet entertainment, automobiles, smart cities, education, healthcare, retail, advertising, finance, real estate, and other industries.

Key Technologies/Products/Services

1. SenseCore AI Infrastructure: SenseTime's artificial intelligence infrastructure, providing powerful computing power support for large model training and inference.
2. SenseNova Large Model System: Including a series of large model products such as "SenseNova," covering AI applications in multiple fields.
3. Computer Vision Technology: Including facial recognition, image recognition, text recognition, video analysis, etc.
4. Intelligent Automotive Solutions: SenseAuto intelligent automotive platform, providing intelligent cabin, intelligent driving, and other functions.
5. Smart City Solutions: Using AI technology to improve urban management and service efficiency.
6. AIDC Services: Providing AI model training, fine-tuning, inference, and other services for customers.

Market Position

SenseTime maintains a leading position in multiple AI segments. According to IDC reports, SenseTime ranks first in China's AI software market and has been the top-ranked in the computer vision submarket for several consecutive years. In the intelligent cabin market, SenseTime's market share also ranks first in the industry. The company's technological strength and market performance make it Asia's leading AI algorithm provider.

Financial Performance (Continued)

• Revenue Trend (Continued)

  • Generative AI business revenue increased by 255.7% year-over-year, accounting for 60.4% of total revenue.

• Profitability

  • The company is still in a loss-making state, but the loss margin has narrowed.
  • H1 2024 net loss decreased by 21.2% year-over-year.

Future Outlook and Challenges

Outlook:

1. The rapid growth of the generative AI market provides huge development opportunities for SenseTime.
2. Continuous technological innovation, especially in large models and AI infrastructure investment.
3. Expansion into international markets to enhance global influence.
4. Deepening industrial applications to promote the implementation of AI technology in more fields.

Challenges:

1. Continuous loss pressure, requiring accelerated commercialization and improved profitability.
2. Fierce market competition, requiring maintenance of technological leadership.
3. Data privacy and AI ethics issues, requiring the establishment of a more comprehensive compliance system.
4. Risk of talent loss, requiring optimization of talent strategy and incentive mechanisms.
5. Global economic uncertainty, which may affect corporate IT spending and AI investment.

Mobvista

Why it's considered an AI-related stock

Mobvista is considered an AI-related stock primarily because its core business relies heavily on the deep application of AI technology. The company's programmatic advertising platform, Mintegral, uses machine learning and algorithm optimization to provide advertisers and developers with precise user acquisition and efficient traffic monetization solutions. In addition, Mobvista also utilizes AI-driven tool matrices in the MarTech field, such as Heat Engine (EnginePlus), to achieve data intelligence, advertising recommendation optimization, and real-time user behavior analysis. These technological innovations give it a significant advantage in the AI marketing field.

Company Overview

• Founded: 2013
• Headquarters: Guangzhou, China
• IPO: December 2018, listed on the Main Board of the Hong Kong Stock Exchange (stock code: 01860.HK)
• Main Business: Mobile advertising technology services and marketing technology services, focusing on programmatic advertising and SaaS tool ecosystem.
• Global Presence: Offices in 17 cities worldwide, covering more than 200 countries and regions.

Key Technologies/Products/Services

1. Mintegral: An AI-driven programmatic and interactive mobile advertising platform that provides advertisers with cross-regional precision marketing services. It is one of the world's leading third-party programmatic advertising trading platforms.
2. Nativex: A mobile performance marketing platform focused on traffic monetization and user growth.
3. Heat Engine (EnginePlus): An AI-driven full-stack marketing cloud product matrix that enables data assetization and intelligent strategy modeling.
4. GameAnalytics: A mobile game data analysis platform that provides developers with user behavior analysis and market insights.
5. SpotMax: An elastic cluster management platform that optimizes costs through cloud computing.

Market Position

Mobvista is an important player in the global mobile advertising and marketing technology field, and its Mintegral platform is among the top in the global programmatic advertising market. With its AI-driven technological advantages, the company has strong competitiveness in vertical fields such as gaming, social networking, and e-commerce. Although its market capitalization is lower than that of international giants like AppLovin, its growth rate and open strategy give it higher growth potential.

Financial Performance

Key Metrics

• 2023 revenue reached $1.054 billion, up 17.9% year-over-year.
• Revenue for the first three quarters of 2024 reached $1.055 billion, up 36% year-over-year.

Revenue Trend

• Programmatic advertising business revenue accounts for more than 98% of total revenue, with Mintegral contributing the majority.
• Non-gaming revenue is gradually expanding, and the mid-core and hardcore game market is growing significantly.

Profitability

• 2023 gross margin was 20.6%, and net income increased by 82.4% year-over-year.
• Adjusted EBITDA in 2023 increased by 191.3%, showing strong profitability.

Future Outlook and Challenges

Future Outlook

• As the global digital advertising market continues to expand, Mobvista is expected to benefit from the further application of AI technology and the upgrade of marketing tools.
• The company plans to strengthen its presence in vertical fields such as mid-core and hardcore games and e-commerce, while optimizing algorithms and bidding systems to improve delivery efficiency and customer ROI.
• Continue to promote the construction of the SaaS tool ecosystem to provide more comprehensive growth solutions for small and medium-sized developers.

Challenges

1. Market Competition: Facing fierce competition from international giants such as AppLovin.
2. Policy Risks: Increasingly strict data privacy regulations place higher demands on its data processing capabilities.
3. Cost Control: As the business expands, server and R&D costs may increase, and the company needs to balance growth and cost efficiency.

Overall, Mobvista has demonstrated strong development potential in the mobile advertising and marketing technology field with its AI-driven technological advantages and global layout. However, the company needs to address the challenges of intensified industry competition and changes in the policy environment to ensure long-term sustainable growth.

Kingsoft Cloud

Why it's considered an AI-related stock

Kingsoft Cloud is considered an AI-related stock primarily because it:

• Provides cloud computing infrastructure and services that support AI development and deployment.
• Continuously invests in AI technology and develops AI-oriented products and solutions.
• Provides high-performance computing, storage, and other resources for AI companies.
• Actively lays out cutting-edge AI fields such as large models and launches related services.

Company Overview

Kingsoft Cloud, established in 2012, is one of China's leading independent cloud service providers. The company was listed on NASDAQ in 2020 and completed a dual listing in Hong Kong in 2022. Kingsoft Cloud provides comprehensive cloud computing services, including public cloud, enterprise cloud, and artificial intelligence solutions, serving the internet, public services, healthcare, finance, and other industries.

Key Technologies/Products/Services

• Cloud Computing Infrastructure: High-performance servers, storage, networking, etc.
• AI Development Platform: KingAI artificial intelligence platform, supporting full-lifecycle AI development.
• Large Model Services: Qingzhou industry large model, Hanhai large model development platform, etc.
• Industry AI Solutions: For vertical fields such as government, healthcare, and finance.
• Intelligent Computing Cloud Services: Provides high-performance computing resources for AI training and inference.

Market Position

Kingsoft Cloud has a certain share of the Chinese cloud computing market, but its market position has declined in recent years. In the public cloud IaaS market, Kingsoft Cloud is no longer among the top six. However, the company still maintains strong competitiveness in segments such as gaming cloud and video cloud. In the AI field, Kingsoft Cloud is actively deploying, but has not yet formed a significant advantage.

Financial Performance

• Key Metrics

  • Revenue for the first three quarters of 2024 was 5.553 billion yuan, up 4.25% year-over-year.
  • Q3 2024 revenue was 1.886 billion yuan, up 16% year-over-year.
  • Net loss for the first three quarters of 2024 was 1.77 billion yuan.

• Revenue Trend Revenue growth has slowed, with declines in both 2022 and 2023. Growth resumed in the first three quarters of 2024, but the growth rate is still relatively slow.

• Profitability Continuous losses, with accumulated losses of about 12 billion yuan since 2017. Although the loss margin has narrowed, turning a profit in the short term still faces challenges.

Future Outlook and Challenges

Outlook:

• Rapid growth of the AI market brings new opportunities for cloud services.
• Continuous investment in AI technology R&D to enhance competitiveness.
• Deeply cultivate vertical industries to create differentiated advantages.
• Collaborate with the Kingsoft ecosystem to expand AI application scenarios.

Challenges:

• Intense industry competition, with market share under pressure.
• Continuous losses affect long-term development.
• Technological innovation and commercialization capabilities need to be improved.
• Significant financial pressure, affecting strategic investment.

GDS Holdings

Why it's considered an AI-related stock

GDS Holdings, as a high-performance data center operator and service provider, provides key infrastructure support for artificial intelligence applications. With the rapid development of AI technology, the demand for high-performance computing and large-scale data storage has surged, and GDS's data center services directly benefit from this trend. The company also actively applies AI technology to the operation and management of data centers to improve efficiency and reliability.

Company Overview

GDS Holdings is a leading developer and operator of high-performance data centers in China and Southeast Asia. Founded in 2001 and headquartered in Shanghai, the company is listed on both NASDAQ (GDS) and the Hong Kong Stock Exchange (9698). GDS primarily provides data center hosting, management, and cloud connectivity services for enterprises in emerging technology fields such as cloud computing, big data, and artificial intelligence.

Key Technologies/Products/Services

• High-performance Data Centers: Provide stable, efficient, and scalable data center infrastructure.
• Intelligent Operation Management System: Utilizes AI technology to optimize data center operating efficiency.
• Green Energy-saving Solutions: Develops and applies new technologies such as liquid cooling and energy storage to improve energy efficiency.
• Cloud Connectivity Services: Provides customers with flexible multi-cloud access options.
• Smart DC Solutions: Including Turbo (green and low-carbon), D-Pre (agile delivery), and X-BP (intelligent operation) series products.

Market Position

GDS Holdings occupies a leading position in China's third-party data center service market and has been ranked first in the "Top 10 Data Center Service Providers in China" by the China Academy of Information and Communications Technology (CAICT) for several consecutive years. The company has deployed more than 1.5GW of IT capacity in China's core economic regions and is actively expanding into the Southeast Asian market, establishing strategic locations in Singapore, Malaysia, Indonesia, and other locations.

Financial Performance

• Key Metrics

  • 2023 full-year net revenue: 9.9565 billion yuan, up 6.8% year-over-year.
  • 2023 adjusted EBITDA: 4.6241 billion yuan, up 8.8% year-over-year.
  • 2023 adjusted EBITDA margin: 46.4%.

• Revenue Trend The company's revenue continues to grow, with net revenue in Q2 2024 reaching 2.8264 billion yuan, up 17.7% year-over-year. International business growth is particularly significant, with Q4 2023 international business revenue up 690.2% year-over-year.

• Profitability Despite revenue growth, the company still faces profitability pressure. The net loss in Q2 2024 was 231.8 million yuan. High capital expenditures and operating costs are the main factors affecting profitability.

Future Outlook and Challenges

Outlook:

• AI-driven data center demand continues to grow, providing huge opportunities for the company.
• Rapid expansion of international business, especially in the Southeast Asian market, is expected to become a new growth engine.
• Continuous technological innovation, such as Smart DC solutions, helps enhance competitiveness.

Challenges:

• Intense market competition may lead to price pressure, affecting profitability.
• High capital expenditures and debt levels put pressure on the company's finances.
• Need to balance rapid expansion with improved profitability.
• International business expansion faces challenges in terms of policies, culture, and other aspects.

These summaries provide a comprehensive overview of each company's involvement in AI, their business operations, market position, financial performance, and future outlook, including the challenges they face. Let me know if you need further analysis or information on any of these companies or other topics.

Disclaimer: This post is for informational purposes only and is not investment advice. Stocks or financial products mentioned may carry significant risks. Please make investment decisions carefully and at your own risk.

Best of luck with your investments!