CMSI: China AI Internet Sector Valuation Still Attractive, Top Picks BABA-W , KNOWLEDGE ATLAS , KUAISHOU-W and JOYY Inc.
Complete. Here is the key summaryCMSI maintains a positive outlook on China's AI internet sector, citing attractive valuations despite recent underperformance. The broker highlights accelerating B-end AI commercialization and identifies key catalysts like WeChat Agent and domestic chip progress. Top stock picks include Alibaba, Knowledge Atlas, Kuaishou, and JOYY, while also recommending undervalued Tencent and Minimax for potential recovery.
CMSI published a research report stating that as artificial intelligence commercialization accelerates, valuations of China’s AI internet sector remain attractive. The broker noted that following expectation resets, HSTECH has underperformed in 2Q26 to date compared with 1Q26. Although valuations of China’s internet sector remain at historical lows, results in 1Q26 demonstrated relatively strong earnings resilience.
The broker said AI remains the core investment theme for China’s internet industry and continues to develop rapidly. Among these, B-end commercialization is accelerating and gradually penetrating white-collar workflows, while C-end commercialization is still at an early stage. WeChat Agent is expected to become an important catalyst in 2H26. Model iteration and progress in domestic chips are key variables.
The broker maintained its recommendation rating on the sector. Its top stock picks are BABA-W (09988.HK) +2.600 (+2.421%) Short selling $2.11B; Ratio 12.165% (Alibaba Group Holding Limited (BABA.US) ), KNOWLEDGE ATLAS (02513.HK) -4.000 (-0.377%) Short selling $79.21M; Ratio 4.328% , KUAISHOU-W (01024.HK) +0.960 (+2.103%) Short selling $453.04M; Ratio 19.902% , and JOYY Inc. (JOYY.US) . It also suggested paying attention to undervalued companies such as TENCENT (00700.HK) +5.400 (+1.181%) Short selling $2.30B; Ratio 17.433% and MINIMAX-W (00100.HK) -32.400 (-7.448%) Short selling $36.42M; Ratio 7.258% , believing both have greater potential for valuation recovery. (sl/a)(HK stocks quote is delayed for at least 15 mins.Short Selling Data as at 2026-06-11 16:25.) (Real-time Streaming US Stocks Quote; Except All OTC quotes are at least 15 minutes delayed.)