Dahua Jixian: China's Internet AI is shifting from infrastructure investment to intelligent monetization, preferred Alibaba-W (09988), Tencent Holdings (00700) and Smart Spectrum (02513)

The Zhitong Finance App learned that Dahua Jixian released a research report saying that the AI industry is shifting from a production capacity-driven investment cycle to an intelligent monetization cycle, where model differentiation, reasoning efficiency, enterprise adoption, and sustainable gross profit creation will increasingly determine value; the bank maintains a constructive view on China's artificial intelligence value chain, maintains the industry's view of “synchronizing with the big market”, and preferred Alibaba-W (09988), Tencent Holdings (00700), and Zhi Spectrum (02513), all with a “buy” rating.

The bank pointed out that it favors Alibaba and Smart Spectrum, and that Tencent Holdings is a long-term beneficiary of monetizing artificial intelligence applications. Since mid-2026, the capability gap between leading models between China and the US has widened in complex reasoning, programming, and long-term proxy tasks, but it is expected that the Chinese model will narrow the gap by mid-2027. Leading model developers in China are moving from benchmark performance to real-world adoption and commercial scalability, programming, cloud service provider cooperation, and vertical artificial intelligence agents, which will be the main drivers for the next phase of monetization.

Anti-distillation measures or speed up industry integration, and Chinese laboratories are developing tools and synthetic data pipelines to maintain progress. Increased capital, data and engineering thresholds will further benefit first-tier laboratories with proprietary feedback loops, advanced post-training, and efficient reasoning infrastructure.

In terms of geopolitics and interest rates, the bank believes that if the US Congress is controlled by the Democratic Party, it may help speed up the resolution of the US-Iran conflict, ease oil prices and inflation, and pave the way for the Federal Reserve's easing and improving the liquidity of Chinese depository documents, which is potentially beneficial to China's internet valuation. Among them, the liquidity-driven valuation increase is expected to be the most immediate catalyst, particularly beneficial to Alibaba and Tencent Holdings.