(Feb 20): Shares of China’s generative AI start-ups Zhipu and MiniMax Group Inc soared in Hong Kong as the market reopened after the Lunar New Year, with investors piling into pure artificial intelligence (AI) plays and rotating out of traditional Internet giants.
Zhipu — officially known as Knowledge Atlas Technology JSC Ltd — jumped as much as 25%, while MiniMax climbed up to 16%. Since their Hong Kong listings in January, both stocks have risen more than fourfold.
Meanwhile, tech giants Alibaba Group Holding Ltd and Tencent Holdings Ltd fell as much as 4.3% and 2.8% respectively, despite reporting strong holiday results. Alibaba’s AI app Qwen processed 130 million orders during the Lunar New Year campaign, according to Jefferies analysts. Tencent’s app Yuanbao also hit a new milestone, with daily active users exceeding 50 million.
“Money is rotating into pure AI names, while diversified platforms like Alibaba and Tencent are seeing some profit-taking, said Billy Leung, an investment strategist at Global X Management. “Recent China AI model releases have reignited interest in foundation model leaders.”
Chinese AI companies raced to roll out updated models and new features in the run-up to the holiday, typically a peak season when millions of users experiment with new apps and digital services. The push has also been driven by competition, with firms eager to launch before DeepSeek’s next major unveiling, which it has teased in recent weeks. These factors have kept investor attention firmly on the sector.
See also: Intense and fast-paced Year of the Horse
Wall Street analysts are also optimistic on MiniMax. Morgan Stanley, Jefferies and UBS initiated coverage with buy-equivalent ratings, with UBS seeing a price target of HK$1,000 — about 8% above the current HK$926 level. Morgan Stanley projects MiniMax’s revenue could reach around US$700 million by 2027, implying as much as a tenfold increase over the next two years.
At the same time, expectations for China’s tech giants appear to be shifting. Investors are increasingly weighing how much these companies are spending on AI against tangible returns. Bloomberg Intelligence estimates that Alibaba and Meituan would offer about US$870 million in consumer incentives over the holiday as they competed for engagement. Tencent was planning to spend US$145 million.
Regulatory scrutiny also added to the pressure. Chinese authorities summoned major online platform companies last week, directing them to rein in promotional practices and eliminate “involution-style” competition. Alibaba, Baidu, Tencent, JD.com were among the firms called to the meeting.
See also: Alibaba leads tech slide after Pentagon briefly shows blacklist
“Traditional giants like Baidu, Alibaba, and Tencent are under pressure because their core businesses — advertising, e-commerce, and gaming — are showing slower growth than the market had priced in,” said Dilin Wu, a research strategist at Pepperstone Group Ltd. “Investors are increasingly scrutinising how quickly their AI initiatives can contribute meaningfully to earnings.”
Elsewhere, Chinese travel stocks and some consumer names declined as trading resumed in Hong Kong. Citigroup analysts said domestic passenger throughput was largely on track, with airlines and road travel outperforming, though railway data came in slightly weaker.
Air China Ltd shares fell as much as 2.4%, while China Eastern Airlines Corp slipped 1.9%. Among consumer stocks, Laopu Gold Co tumbled as much as 5.2% and China Tourism Group Duty Free Corp lost 4.5%.
Uploaded by Felyx Teoh
