Soochow Securities has issued a research report reiterating its "Buy" rating on Z.AI (02513). The firm noted that the company has completed remediation of the ZCode product security issue and has made ZCode open-source, predicting that the impact of this incident on fundamentals will be minimal.

Per the company's disclosure, it has fully addressed the security concerns raised by the community regarding ZCode and has open-sourced the product for community oversight. Going forward, Z.AI will establish a standardized mechanism for responding to product security vulnerabilities. Regarding the code data mentioned in community discussions, the company has stated it did not retain such data and never used it for model training. Following the remediation, the company has also successfully passed a third-party security audit.

Where the market's attention lies

Soochow Securities outlined its key perspectives, starting with the question of whether the incident will affect model training. The report highlights that the company's latest disclosure emphasizes that it never used relevant cloud data for model training, which confirms there will be no impact on future training. Given that ZCode underwent deep integration and specialized optimization around the company's proprietary models, the model, tools, and execution workflow are tightly aligned. As a result of the open-source move, Z.AI retains the ability to achieve optimal configuration of its models and harnesses while remaining open.

The growing importance of the harness layer

The firm also points out that the harness is emerging as a new moat, with different harnesses having a substantial effect on model delivery outcomes. Previously, OpenCode evaluations showed that ZCode achieved a cache hit rate of 98.6%, ranking first among all harnesses evaluated. More recent third-party assessments indicate that ZCode combined with GLM-5.3 and GLM-5.3 Flash delivers competitive evaluation pass rates alongside lower costs.

Assessment of the incident's overall impact

Soochow Securities expects the incident to have a limited effect on ZCode. The product has maintained rapid growth, reflecting strong market acceptance. Within one month of its launch, at mid-August, users surpassed one million, and by mid-September, that number had doubled. Currently, ZCode ranks among the top three coding agents in China.