The business structure of SENSETIME-W (00020.HK) -0.070 (-4.459%) Short selling $89.44M; Ratio 7.265% is shifting towards GenAI from the original smart city, smart business, smart life and smart auto, HSBC Global Research issued a research report saying.
The 2023 GenAI revenue grew 2x YoY, contributing 35% of the total revenue. The Company's share price has rocketed 130% since the release of its "SenseNova" 5.0 version on 23 April.
SENSETIME-W said that the performance of "SenseNova" 5.0 version is comparable to that of GPT4-Turbo, and it has been selected by well-known clients such as KINGSOFT (03888.HK) -1.500 (-5.525%) Short selling $29.70M; Ratio 14.144% and XIAOMI-W (01810.HK) -0.580 (-2.918%) Short selling $165.01M; Ratio 6.359% , which is believed to drive faster growth in GenAI-related revenue this year, according to the report.
However, HSBC Global Research also warned that competition in China's AI market mainly comes from domestic players, including BIDU-SW (09888.HK) -4.600 (-4.283%) Short selling $133.16M; Ratio 10.968% (BIDU.US) , BABA-SW (09988.HK) -0.950 (-1.113%) Short selling $391.87M; Ratio 10.756% (BABA.US) and TENCENT (00700.HK) -11.400 (-2.886%) Short selling $1.02B; Ratio 8.668% , and that consolidation is likely to occur in the market in the long run as foundation models in the market continued to be upgraded, and as companies invest more in capital expenditures.
The major shareholders, BABA-SW and Softbank, earlier sold shares in SENSETIME-W, helping to alleviate the pressure from extremely high share price, HSBC Global Research added.
Currently, HSBC Global Research kept rating at Hold on SENSETIME-W, with a target price of $1.6, believing that the GPU technology bottleneck and increasingly fierce competition in the market will continue to be unfavorable factors for its future development.
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