HSBC Global Research’s report mentioned that DeepSeek’s R1 model, launched in January, offers Chinese clients a high-performance large language model (LLM) that is free to use, which is predicted to heighten competitive pressure in the industry. However, the broker assumed SENSETIME-W (00020.HK)  -0.010 (-0.704%)    Short selling $65.13M; Ratio 19.387%   retains key advantages, namely its multi-modal and industry expertise.

SenseTime’s experience in serving enterprise clients enables it to integrate AI solutions into their workflows, the broker noted, forecasting the group’s revenue to grow 26% YoY this year, primarily driven by Gen AI, followed by Smart Auto and Computer Vision.

As the rapid growth of Gen AI dilutes profits, the group’s gross margin is expected to fade 6.9ppts YoY to 36% for 2025. However, with restructuring completed in 4Q, capex is projected to sink by 5% for 2025.

The company maintains its goal of achieving breakeven in 2026, though this currently appears challenging. The broker maintained a Hold rating on the group, raising its target price from HKD1.6 to HKD1.7.
(HK stocks quote is delayed for at least 15 mins.Short Selling Data as at 2025-06-20 16:25.)