Goldman Sachs has released a research report stating that MiniMax-W's (00100) multimodal strategy is a key differentiating advantage. The H3 model is in its final pre-launch stage and is expected to be unveiled soon, which the firm believes will have a profound impact on the multimodal industry landscape. Goldman Sachs has reiterated a "Buy" rating on MiniMax-W with a target price of HK$860.

MiniMax shares jumped 13% in Hong Kong.

Goldman Sachs noted that MiniMax's founder and CEO, Yan Junjie, recently revealed in an analyst meeting that the company's future focus will be on pursuing the best cost-effectiveness for each of its models. Specifically, the current M3 model processes trillions of tokens daily, and the open platform/API revenue has already reached a healthy gross margin level. The company aims to ultimately achieve a high double-digit gross margin. It is also anticipated that the M3 Pro model, slated for launch between September and October, will offer significant cost benefits.

Goldman Sachs expects MiniMax to be included in the Southbound Stock Connect in August this year. Coupled with its current market valuation, which is at a significant discount compared to Chinese video generation model peers, the company's articulated M3 model competitiveness strategy and the upcoming launch of the H3 multimodal product are seen as positive drivers for annual recurring revenue (ARR) growth. This is expected to lead to significant valuation recovery in the second half of the year.