Z.AI Claims New Model Taking on Anthropic, OpenAI | The China Show | 8/27/2026

Not going to Shanghai. Shenzhen. Here in Hong Kong, you're watching the China show. I'm Yvonne Man with David Ingles. Good morning. We're coming down to the open up markets in Greater China. Let's get to a top story. Top stories today. Asian stocks across the region are rising after Nvidia's bullish forecast, and sales will continue to surge into next year. That's easing concerns. Eye spending could be losing momentum. We're watching shares of Z. I after a confirm it's behind the chart topping new AI model that can compete with anthropic and OpenAI. Now China's AI earnings also in focus, with minimax reporting widening losses despite an almost 300% jump in revenue since times first half sales, also falling short of that, analysts estimate. Meanwhile, much more on China's earnings season. Speaking exclusively with the CFO of software maker DSG and the head of in silico medicine. All right. We are starting the show with some breaking news. Not just how it comes to be, okay, but. Shia, just crossing your terminal here right now. We are learning a little bit more about what the pricing is going to be ahead of that September 1st listing here. So they're talking about pricing it at about $48 and 56 HKD per share. So that is sort of mid range from what people are expecting in terms of that IPO. So certainly uh, it is an interesting one just given the valuation and how it's really dwindled right from being a big growth company to now, something which has dealt with lots of geopolitical tensions and of course, the macro weakness in China. So now a lot of talk about, you know, really where this valuation is going to go moving forward. And what does does mean for the whole appetite for this listing happening next week. You got a feel for those that got in at series D. Um, going into of course where we are right now in that down round if you are going into the IPO, but yes, mid-point of the range roughly. Going into next year's next week's listing. The other big story, of course. And we'll get to Nvidia in a moment, I promise. South Korea also coming out to be okay. Back to back rate hikes. Bond faces are reacting to one is stronger. And we're also looking at a revised growth forecast here coming out of the be okay to the upside there. So in the next hour the briefing will begin. And we'll also get into the six month dot plot and how much higher rates could actually get there out of the Bank of Korea. But certainly all things considered, including this, the stars are aligning for risk assets to rally today. So you obviously have a good macro take coming out of the bulk of the Nvidia earnings coming through. Asia is doing this. We are at 8/10 of 1% by the IT index within the Asia Pacific benchmark. Uh, the moves are seeing in US futures reflective of this 5% game we're seeing across uh Nvidia VIX futures also are pushing lower uh to about 17 point as we speak, right? Some of the biggest suppliers of Nvidia trading across the region and the companies with the most exposure, some of them, of course, to the Nvidia story on your screens right now, Japan, of course, is pulling back a little bit. 9/10 of 1% that Japan listing specifically the dollar dollar yen gold is consolidating. And of course you have iron ore prices, which is the latest one we're tracking going into the commodity story has been rallying of late about one month high to give or take there for iron ore prices in 50 futures. We'll get into the earnings story in a moment here. So there's an eye component in the U.S. with Nvidia a lot of reporting as well and some new models as well to tell you about in a moment here. And as you can see on your screens, we are called flat up big move yesterday on the ten year yield later on. And of course is still very much in focus given, of course, the strength we've seen in the Chinese currency of late. Yeah. So Nvidia certainly is lifting the sentiment here this morning. They've given that bullish sales outlook when it comes to fiscal 2028. Right. When they're talking about expecting 70% in terms of top line growth for 2028. The estimate was for a 45% sort of growth. So certainly this is blowing it out of the water in some ways. And you're starting to see you know, it wasn't enough to really, I guess, tamp down the temperature and the concerns around circular deals when it comes to where this whole eye spending is that maybe we are not, in fact, losing momentum if they're seeing that sort of visibility in terms of the demand picture as well. Um, but yes, I mean, take a look under the hood and look at the revenue breakdown, and you're still seeing some pretty, you know, explosive numbers here in some ways here. And yeah, it's almost like a given now. Yeah. It's I mean, we're double on the data center business, which is obviously the bulk of the business. And I think within that, of course, they, uh, they perhaps didn't do enough to address concerns over dependability on, you know, few customers. But of course, the AI, cloud, uh, enterprises business is up 134%. So I guess in that way that they are seeing growth in other parts of the business now, I think to the point of line was making. Right. They're only growing as quickly as they can. They would have gone faster. They would have given us better guidance on that 70%, which, by the way, is rare that they look that far into the future with a number that big because of the constraints on the supply side of things. But the CFO basically told analysts at a company does expect to have on point fiscal 2028 to grow by 77 0%. Have a listen. The surge in I demand is driving a global infrastructure buildout, supported by an expanding and diverse set of growth opportunities spanning hyperscalers, AI labs, AI natives, enterprises, and sovereign customers. We expect to grow revenue by approximately 70% in fiscal 2028. And our Bloomberg Tech co-anchor Ed Ludlow has more details on the results. Nvidia never does this. They do not give full fiscal year outlooks. And so saying growth will be 70% for revenue in fiscal 28 was not just astonishing to take that step, but when you compare it to Wall Street estimates going into this earnings print, the street was seeing 45% growth in fiscal 28. Add to that the commentary from Jensen Wong and Collette Kress, who I spoke to on the phone, the CFO, that basically demand is running at 100%, or there are lots of parts of Nvidia's business where demand is doubling right now. The reason they're guiding growth of 70% is that's what they can supply. The main constraint is still memory. And so what they can get their hands on that results in 70% top line growth. It's also impacting margins. And Nvidia is pretty transparent that margins will bottom out in the fiscal fourth quarter at around 71 to 72%, still astonishingly high for this industry. But the net result is Nvidia is also going to raise prices starting at the beginning of the next fiscal year. That confirmed some recent Bloomberg reporting. There were questions about circular financing, which Nvidia pushed back against and said they are making investments on companies where they can see demand for that company's work, particularly the Frontier Labs. It's just that they're not investment grade companies. The final thing that gentleman said is that if he has one regret, it's that he did not invest more. And earlier in those frontier labs, two of which are about to IPO. And when he was quizzed about them working on their own chips in the frontier domain custom silicon, he said, well, we're they're pretty confident in the economics of Nvidia systems and that in the future he feels that it's very likely that that AI will be run on Nvidia technology. This is Ed Ludlow for Bloomberg News in San Francisco. Yeah. So it's interesting that, you know, Jensen Huang says ride the AI for structure build out is at full steam. Right. And, you know, even when it comes to you carve out the China business, you are starting to see that some sales are coming back, uh, from, of course, that market, uh, the world's biggest market when it comes to semiconductors. We're talking about only 8%, but certainly it's better than what we saw in the previous sort of year, which was basically close to zero of zero. Right. So it seems like what we're seeing is some improvement. Still falling short from what President Trump has allowed for in terms of how many chips that can be. So there maybe perhaps that's because Beijing is still sort of tightening their grip on on what companies in China can buy and buy. And they really want to, you know, pivot to more of their homegrown sort of chips as well. So so there's still that sort of flair to it all, but at least there's some contribution coming through from China now. Yeah. The dollar figures about seven high seven billions. Uh, on total revenue for the quarter of about 9697. So that translates Avon's point to about eight 8%. I think the takeaway I think from this, and also what Ed just mentioned is, uh, they're not growing as quickly as they can. But are they going as quickly as they should, which is uh, I think another thing altogether. And I think they'll continue to invest and lend their balance sheet to some of their partners in the business to allow that growth to continue. Now, I think on the I story in China, right. We also had some updates on this from major AI players who had minimax deep seek in the last, let's call it 24 hours showing for one the results on revenue in the first half of the year. Uh, Japan says that it may the ops alpha model that's actually top usage charts. And Alibaba of course we talked about this early on right before show started releasing this lower priced AI platform. Uh, so to wrap all of those things for us in Lower China, correspondent is here with us on set to talk about it. Why don't we start with the new models? Yeah. So remember we're talking about the Ox Alpha model, which on Chinese social media has been nicknamed as New Ly after that. And it made it to, um, uh, so it was released anonymously. And Z AI has now come out to claim that they made that model. They have renamed it to the official name JL and 5.3 flesh. Um, and they are releasing it for another week for free. They haven't indicated what the pricing will be after that. But again, this is the largest launch ever on the open router leaderboard. If you look at its token usage in the first few days, it's shot up to the top of the chart by a huge margin. Um, and so, uh, really interesting to see what is next for this company. And, uh, yeah, a lot of investments into the advancements of these models. Uh, walk us through the match earnings as well. Yeah. So minimax, uh, really strong revenue growth, almost quadrupling. So it's up by 280 over percent when it comes to revenue losses though is quite flat I think compared to the previous year even narrowing slightly. Uh, but then if you look at the full year projection from analysts, they're expecting losses to double year on year. And if you look at the absolute numbers, the losses are still close to I think it's triple A while. They are taking it in revenue. So that is still a main concern around the monetization of this model. Uh, deep secret very quickly. Yeah. Deep sea as well. Seeing the same trend as minimax. My exponential growth. It's a Jan to July revenue is ten times of its total revenue last year. This is according to the information reporting. And again you look at the losses though it is far higher than the revenue. So similar trend. All these companies are pouring a lot of money into R&D into the computing capacity. And again, if you talk to Robert Lee, you know, he is very, very bearish on the profitability of these companies in the next three years. Okay. Thank you so much. And lo with a wrap there of the China air space will get market reaction in about nine minutes at the open 19 minutes away from now. Right. Coming up here we're talking market strategy with the CEO of air Group. Markkanen will be joining us uh with his ideas uh in a couple of minutes. Stay tuned for that interview coming up. Of course. Uh, counting down to the open of trade. We are last we checked, flat on futures. Sideways. You could call it that. Uh, the weather there compared to anything you see in markets announcement right now, that's a very low bar. Amber rainstorm this morning 18 minutes away. The opening bell. This is the China show. All right. Welcome back. Uh. Futures uninspired. I mean, the action is certainly underneath the hood when you look at the sector movers. I hope energy is going to be very much in focus. Given. Of course, we haven't even talked about that with President Trump said. And, uh, did around, uh, some of the data center place there and various story. Of course, we also have a rate decision coming through today out of the Bank of Korea, one in the Philippines and later on, Botswana and Rwanda are also coming out with their respective rate decisions today. Now our next guest says the ice I cycle remains intact, but investors should view it as through a broader lens. That's bring in Markkanen Group CIO at a. Very nice to see you sir. Good morning. Thank you for having me on the weather. Uh not your fault. This is, uh. This is. The cards were dealt. The cards the equity markets are dealt. Need to be seen from the prism of rising interest rates and the term premium there. How do you look at that? What's the framework? Yeah, we're seeing a structural change. If we talk about the global situation us because we've got different things going on in different parts of the world. Obviously global rates led by the US, um, what we're seeing there is really an appreciation of think of the neutral real rate is probably going to be sustained at a higher level back by improving productivity, productivity gains coming through from the advent and application of AI technology. So that's that's the background. In the meantime, what you're also seeing is geopolitical risk. You're seeing a huge amount of issuance of, uh, of debt, both from build out of AI infrastructure. But also treasury itself is issue about talk about buying back, but it's still heavily issuing because of the fiscal deficit. So all of that is adding to the term premium. Interestingly, a lot of the rhetoric is around inflation resurgence. But actually inflation expectations are well anchored. And what we're seeing is a rise in the real interest rate. That's really what this is about. Plus the term premium picking up. So that's the that's a global environment led by the US. And despite this intervention that the Treasury is trying to do in the long end. You know you see the bond vigilantes trying to in some ways protest that in some ways, I think just given what Warsh has done as well, the anger I see, the anger in the short end is the fed and what the expectations are. But the long end, what could be that anger? What's driving the long end? It's it's the need for premium because of the the demand for funding. And we've seen particularly from the private sector with AI infrastructure, it's reached the point where those big hyperscalers are no longer able to fund their needs that build out as they're competing effectively for for market share. Yeah. Longer term, we've seen this before. In previous cycles with different technology as they're competing for for that market share. They've reached the point where they can no longer fund it out of revenue, out of recurrent revenue. So now they're coming to the market. It's putting demand on the market. Resources are always scarce. Financial resources are scarce. Remember, coming out of 2025, the fed itself was had a process of quantitative tightening. And although that's over the the image of that the shadow of that is still working its way through. So that's led to the term premium. But at the same time, of course, we're all concerned about the fiscal deficit and the long term funding of that. And what we're seeing in terms of the Treasury's activity, it can move the maturity profile around, but it can't get away from the fact that that debt needs funding. Do you think that's pushing investors away from the bond markets, or is that luring money back in. Because I think that there's yeah, because the demand is there. Anyway. The demand is there. Um, and you know, investors are are keen to participate because there are opportunities to, to to pick up, um spread. Um, take an insurance company like ourselves. Um, we are constantly being approached by, um, big issuers both in the public and private markets. A lot of these companies, although they can go to the public markets, prefer to do private deals. Right. Um, they prefer to, you know, have the covenants tailored to what they need. Um, so there are real opportunities. So it's a question of matching capital to where the, the demand for that credit is. And that's the mechanism we're seeing. Rates are higher. Ordinarily you would expect to come back to your original question. Ordinarily you would expect that to be impacting negatively on the stock market. Um, and you would say, oh, equities now looking a little bit pricey, a little bit overvalued. But what we're seeing is it's all predicated on what I started with, which is expectation of the neutral real rates being sustained at a higher level because of the productivity gains. Now, if you ask me where those gains are accruing, we can't see it yet. It's still the returns are accruing to the providers of these services. The manufacturers of these chips. And now it's going into the infrastructure. We're not really seeing evidence, evidence of it improving earnings margins in company earnings reports about the expectation. That's what that's what investors are expecting. We've been seeing you mentioned about what we're seeing the issuance in Denmark. We're seeing the spreads widen a little bit in some of these tech players. Right. Are we likely to see a little bit more that spilling over to, you know, other debt. I mean I'm just wondering like we're seeing a little bit of strain, but does it spill over to other. Well, it's an interesting question because what we've seen since really about 2015 is in the public markets, spreads have been extremely tight and there's a real crowding out. And for long term investors, that means you're not getting enough return for the risk you're taking, particularly when you go out longer dates. So the the reward you're getting for taking on credit term risk is not there. And that's driven a lot of investors, long term investors into the private markets because that's where the spread is accruing. And what's the read through across equity markets then is this bullish equity markets. Yeah. So it's a deal with the US because that's you know most well what is driving global sentiment. Um we're seeing a broadening out. So a lot of the earnings that we're seeing it's over 80% of companies reported earnings ahead of expectations. Earnings surprises on the S&P were around 30% of those that reported. So we've seen a tremendous continuation of momentum on earnings in the last, um, few stages of the cycle that's been really driven by, um, a small number of companies that are tech oriented, I oriented, but we are starting to see a broadening out. And interestingly, if you look at the performance of the Russell 2000 value is actually ahead of the Nasdaq and the S&P here today. So these things are creeping up on investors. So a lot of concern about valuation. But we are seeing a broadening out of the market. And that's a very positive sign because that market concentration for any investor but particularly an investor like us long term investor, the longer that concentration process, the more you're tied up into that momentum and the more you worry of course, that that that concentration is vulnerable. But why now we're seeing a broadening out. Hopefully that continues. That will reassure investors. So as a result we're still overweight risk assets. But you look beyond just the semiconductor trade now. Absolutely absolutely. And I'm beyond the U.S. and Asia then that. So Asia offers some opportunities. We've seen a reweighting. If you look at the fund data out in this part of the world, we've seen a reweighting out of Taiwan, out of Korea, Into other markets in the region, not India yet, but certainly we've seen a marginal increase in allocation to China. Um, I think Taiwan and Korea obviously very much tied to the I theme. So all of those comments about concentration have spilled over into those markets. And that's why we're seeing a broadening out, if you like, in this part of the world as well. Yeah, I think to your point, you could argue Korea and Taiwan are still in that concentration phase that the U.S. is getting out of right now. So when you look at China, then, for example, and some of that is spilling over into greater Chinese markets, so what where is the value? Is that a hedge. Is that so the I play how are you looking at that. Yeah. So valuations between Hong Kong and China are pretty much within the normal range now. So the allocation between the two international investors a sort of looking at that and adding incrementally I think to China obviously it's a two speed economy where you've got you know with two engines, you've got the export sector and you've got the tech sector, which is really driving growth in China. Hong Kong. Of course, the market is exposed to global themes. So as rates rise, that obviously puts a little bit of pressure on Hong Kong valuations in the way that we've just discussed. But overall, I think China stands to benefit more from the incremental allocation because that AI theme is slightly different, slightly more nascent. And of course, the IPO pipeline here is still very, very strong, as we've seen in Hong Kong. And that is dominated, of course, by by what we're seeing coming out of China in terms of new issuance, particularly in technology. Mark, always good to have you. Mark Conan there a group CIO at IE joining us here this morning. The free market is up in Hong Kong. You are seeing when it comes to this whole AI trade. China tech is doing very well. Look at Z. I rob some 8% here. All right. Now as of course we've been talking about these new models as well. Many match results you know quadrupling nearly when it comes to revenue. So certainly that is lifting the stock here this morning as well. Baba and Baidu are up this morning. Uh we're looking at Primark in Hong Kong is looking like this here. That is about that 25,700 level here. Futures are pointing higher this morning. This is the China show. All right. We are tracking of course earnings and then industrial profit numbers coming at the bottom of the hour as well. But yeah Zettai Alibaba mini Max really front and center here. Just given what we saw with mini Max earnings which seems to be lifting the stock here right now. Of course, some new models that we're talking about when it comes to the China side of things. Uh, we're still dealing with a low turnover though, just given where we are. Um, but yeah, that room fixed will be quite interesting as well. And video suppliers. Right. I think it's given a little bit more clarity on where the sustainability of the I spend is going to be when they're talking about 70% revenue growth, uh, up until fiscal 2028. That does give a bit more visibility there day. But yeah. So watching iron ore prices too. Yeah. Uh, that's at about, uh, several week. Hi there. Let's have a look at where we are. Very quickly. I guarantee you we can get through this. And, you know, I should be having 30s. We have 25 seconds, Baba. And the earnings story I wanted to point out gains there. We're looking at some others as well here John G analytes and the Baidu also seeing some gains there as well. And to wrap things up, the iteration of the Nvidia story within the greater Chinese markets lens takes on the optical victory giant Nvidia suppliers in focus post. Those earnings were called higher, slightly higher on an index level. The opening bell is coming up next. Welcome back. You're watching the China show. So we're dealing with uh, a bit of weather here in Hong Kong this morning. It's been really coming down. Coming down very hard, uh, all morning up until where we are right now. The other story, of course, is on markets and macro. Uh, on the market side, we have some breaking news coming out of Shin in terms of perhaps the guidance there on the listing price for next week. That debuts, of course, early next week. Number one. Number two is to be okay raising interest rates back to back, raising growth forecasts. The one is higher. And also of course the Nvidia story that's playing out across the supply chain across Asia Pacific. On top of all of that earnings in China plus of these new models coming through as well. Um, so lots to get into going into the open today. Yeah. And it seems like it's positive right. For the most part the Nvidia earnings we got through that. And you know after hours actually we saw the stock pop right I think it's the I think it's the first time in six quarterly results that we've actually have seen the stock react in a positive way. Embrace. Given the fact that the earnings and the blowout blockbuster earnings are usually just like a sure thing now it's really about what they said about the revenue growth and what they're seeing up until fiscal 2028, when they're talking about 70%, which is, I mean, 30% more than what the street was expecting here. That is getting a bit more clarity at least, or optimism around that. Maybe this eye spending boom is not losing momentum just yet. It is in some ways helping when it comes to these tech heavy sort of benchmarks that you are seeing. The star 50. The next is seeing the gains on shore here this morning. Let's look at how Hong Kong is faring, given that we have seen some news and earnings from Mini Macs, for example. We've had also new models that have been announced in China. So certainly there is more eye news to really digest here this morning. But we are seeing some decent gains across the board in Hong Kong, really led by the likes of tech here. Asia's tech is up 9/10 of 1%. We're talking about 72 handle for dollar China here this morning. So we're still talking a little bit more about what we've learned right. Whether it's Alibaba sense time uh minimax triple these are things that I should say. Um, we are seeing there, at least when it comes to the pure plays, uh, are doing very well. So Alibaba released a more affordable queen AI model, uh, set this time as well. Give me some news on there. Sort of AI models, but it seems like the tilt is more towards the pure plays today. Minimax just you know, despite, you know, still delivering a profit loss. Uh, revenue nearly quadrupled, uh, there for the latest results. So that's really is helping. And then you have the Nvidia story as well that really the Nvidia positive vibes are really feeling into the region here today. So you are seeing uh parts of the supply chain, whether it's Foxconn industrial tech industry that's up some 3%. Sunny optical here in Hong Kong is up 4% as well. Um yeah. Lots of talk about there. We got some data coming through from China too. Yes. Industrial profits are out. And so they're just taking the July figure. And then we'll look at the year to date. July is up 11.2%. That's clearly compared to July of last year, uh, the period from the start of the year up until July. We're up, let's call it 18% year on year on industrial profits numbers. Okay, that's breaking news number one. Breaking news number two is on to be okay story. So they raise interest rates. We now have an indication of how much further uh, rates can go up. They have a six month dot plot. Keep in mind we're at 3%. And the guidance suggests I think it's 3.25% is where most most that the dots are. So they're not quite done. It seems, according to what most of the people care thinking of in terms to raising rates. So we could be still talking about one more rate hike to come in the next six months or so. Uh, but it was a not unanimous rate decision here today. One out of the seven board members actually voted to hold rates as well. So, uh, you are seeing there a little bit of division, but certainly we'll see what the governor says here in the presser that's happening in the next hour. But yes, we have seen that strengthening, uh, in the war on the back of this as well. Uh, three year bond futures are also parries on the losses on some of the guidance that we've been hearing as well. So a little bit more, I guess you could say on the hawkish side of things for be okay. Yeah. So one possibly two hikes when you look at that high end of one of the was a few of the dots that are taking that to possibly 3.5% okay. Let's table monetary policy for now. Let's turn to page back 1 or 2 uh to the earnings story desk. That's okay. Is a Chinese firm providing AI driven operating systems for China's used car industry. It's also a so-called this red chip company, one of the rare Chinese firms given a listing in the U.S. after an IPO at back in June. As you can see, shares from that point in time have fallen about 47%. Yep. It just posted a nearly 4% year on year rise in second quarter revenue with a net loss of about $35 million. Joining us exclusively now from Hangzhou is the DSC holding CFO, Gene Jo Jeans. I was great to have you. Um, and obviously there's there's been so much going on since. Of course. Uh, your red ship listing in the US not too long ago. But first of all, I mean, for our global audience, maybe tell us a bit more about exactly what I started to show that, um. Show does. Okay. Thank you. I'm really pleased to be here. Well, looking over the world, uh, we're actually a very unique company. We're an auto commerce enabler, specifically focusing on China's used car industry. So we're not a used car dealer. Uh, we're not like Carvana, but we enable, uh, the dealers to do their business better. And we have over 90% market share in the operating system for Chinese use. Car dealer, uh, used car dealers. And on top of that, we gave them transaction services that are essential to their, uh, operations. And also, as of this year, we started giving them, uh, a series of AI applications, uh, from, uh, AI tools to digital employees, uh, and so on and so forth. Okay. 90% of the business effectively means you're going. You can grow only as quickly as the industry is growing, like your your your niche part of the sector. Uh, help us understand, used car sales in China are a function, if I'm not mistaken, or a function of replacement. And, you know, we have all these new models always coming to the market from the OEMs. How quickly is your segment growing? And then we'll talk more about the company. Oh, that's really a great question. So 90% of the market share in operating systems for the U.S. car dealers is our, uh, sort of status in the industry. Uh, however, our growth will mostly come from transaction services that we gave the used car dealers, and those are volume driven. I'm more than happy to talk about volume. Uh, so it's actually we just saw a historic month in June where, according to, uh, the China Automobile uh Dealer Association's official number. New cars of sorry used car sales volume for the first time in history surpassed, uh, new car retail volume. So, uh, we we for that for the for the first. Sorry. For the first half. Um, it they came to, like, very close, like a 1 to 1, uh, kind of ratio. But, you know, we saw that in June. It's it's the first time that, uh, used car sales have surpassed the new car sales. And then, uh, that's great news for companies like us, because, uh, we would love to see more transaction volume, uh, in the used car industry. Uh, however, uh, because of the, uh, cutthroat competition in China's new car market that everybody knows, uh, the the price cuts have also been channeled to the used car market, uh, causing, like, very quick use car inventory depreciation for the dealers, uh, which, uh, added to the difficulty of their operations, and also to your point of the of the EVs. Uh, there are so many EV brands, and they are coming up with like, so many new kinds of EVs or are different, different, uh, different choices for consumers. And that increase the SKU management for used car dealers to, uh, which brings me to my point that, uh, uh, in this new, new age, uh, used car dealing can no longer, uh, have the same, uh, old model where people rely on their experience or gut feelings. Uh, they really need, like, intelligent tools to help them manage their business better. You mentioned about, I mean, in terms of market share, you dominate the space, right? 90% market share in terms of operating systems for used car dealers in China. What is the competition looking like? I mean, and what can you do to maintain that sort of market share? Thank you. Uh. So in terms of the operating system, uh, well, we we really we really don't really see a, uh, meaningful competitor at this point. Um, it's, you know, over 90% and it's an operating system. And as you can probably relate, it would be very hard for you to migrate, uh, from iOS to windows. Uh, just everything is different. And plus, uh, we, uh, gave the dealers so much, so many kinds of, uh, uh, transaction services. And there's also a network effect amongst the dealers in our ecosystem on our platform. So in terms of the operating system, um, we we really don't see, uh, meaningful competition at this point. Plus, we're so diligent. We're not complacent. We're every day we're trying to make our system better for the dealers. And then, uh, uh, but in terms of our main revenue driver, which are the transaction transaction services, we build on top of the operating system? Yes, of course there is competition. In fact, that we I think we are actually reforming many of those transaction services, uh, with the benefit of our data inside of our digital operating, uh, application scenarios and I services. Uh, so, yeah, I mean, we, we I think we have a good, uh, competitive, uh, uh, position in terms of our main revenue drivers, but in terms of the foundation, the digital foundation, where we call also the AI application infrastructure, we don't see any meaningful competition as of now. And also, it's a very unique like around the world that you you rarely see in a huge market, uh, like this with, uh, just one operating system. Yeah. Right. So it's you're almost creating demand as you go, as I help us understand the feedback you're getting from your customers. What do dealers need? What do dealers need you for? And what do you think they will need you for in the future? Thank you. Um, they actually need us for everything. We give them everything. So youth card dealing is a very difficult business. If you, you know, think of yourself as a used car dealer. You have to go find a car, you know, inspected and decide how much to pay for it acquired, move it to your store, clean it and take photos, and then, uh, decide how much to sell it, sell it for. And then the marketed and eventually sell is it's a very difficult business to run. And we give them everything from procurement management to inventory management to, uh, marketing and to internal administration. Everything from, you know, how much you should pay for this car. How's this car moving? A different market, kind of like the stock market that we gave them, the intelligence, uh, so that they can they can make decisions better, they can acquire the right car that's not going to sit on their lot forever. And then they can price it right and sell it to the right consumer. Not missing out on sales opportunities. And then on top of that, they need to collaborate with other dealers. And he knew they need to get the cars from other dealers. Well aware of what people don't know is that most dealers get probably 80% of their cars, not from the consumers, but from another dealer. So there is a lot of B2B matching we do for them. We do inspection for them nationwide to over 250 cities, and then we can deliver to almost everywhere in China, working with over 40,000 delivery trucks. And then at the end, we also help them connect with the other platforms and institutions. Right. Um, in a moment, I think Yvonne is going to ask you about the stock price. But before that, I think just on the earnings itself, obviously you haven't been listed for a very long time. So this is the first set of results we're looking at. It's a net loss. A lot of it I have to note, was because you had to recognize some of the stock options, if I'm not mistaken, internally. So just give us a sense of your path to profitability. When do you think you'll be profitable? If you can see that far ahead. Thank you. So thank you for noting that giant, uh, SBC compensation will have to book this month because of the IPO. Uh, but, uh, our adjusted net loss actually narrowed by 61.5% for Q2. Uh, so we're very, very close to, uh, breaking even. But there's also some seasonality in play. Uh, Q1 and Q2 are generally the low season for our industry. And Q3, Q4, uh, will pick up and Q4 being the peak. So, uh, I'm not really in a position to give, uh, forecasts at this point because we didn't do it, uh, on our webcast. But, uh, you know, I'm, I, we stay very focused on, uh, internal resource allocation discipline. And then, uh, also, I is really helping a lot in, in addition to creating Opportunities for revenue. It's also helping a lot for our internal, uh, operating efficiency efficiency. So I'm hoping that sometime soon, in the next few quarters and then hopefully I can break that news. Yeah, it's only been to two months since you listed. Um, can I get you to take on the, um, the stock price? I mean, the stock has basically been halved since you since you first listed it. What's the what's the why why is there's this disconnect. What's the message to to shareholders? Uh, yeah. Um, we priced our IPO based on the advice of our, uh, bankers. Um, and, uh, we we actually, as the issuer, you really don't know what happens after the, uh, the the stock goes, uh, alive. Uh, you know, there's not much we can do except for focusing our own business, delivering results and showing the market when we're really worse. I think the stock price can fluctuate all the time, right? But value is and is what we actually can control. Turns out really appreciate it. Thank you so much for joining us. Shinjo there, CFO at DSC Holdings. Coming up in the next hour, we have in silico medicines, revenue and earnings that arrive for the first half of 2026 jumped multifold. Respects the founder and CEO about the company's growth drivers and outlook for the second half will probably want to come. This is Bloomberg. Okay. Um she in I think a lot of news there. Uh, so we understand there we go. That uh, uh, price within the range. Of course. Uh, of course, the listing is the debuts next week, so let's call it 48.5, right? $0.56. They're just above the midpoint of the marketed range, and the offering certainly allows. The follow is the failed attempts to go public in the US, I think in 23, in London in 24. Yeah. Uh, and this is the last stretch, right. Um, after what has been quite a bit of a saga for the company here, the twists and turns of Sheehan's journey to the public markets, which ultimately led it to Hong Kong, are also the focus of today's big take. For more, we're joined by our team deputy managing editor of Pens and Lisa Dou, who leads the Asia Consumer and Health Coverage Village. I'll start with you. Yeah, we're finally here. Almost to the finish line, really. But yeah, talking to the pricing that came out. Yeah. So we were able to report that Sheehan is guiding investors, that it's going to price the IPO just above the midpoint of the marketed range, as you said, 48, uh, Hong Kong dollars and $0.56, which means it's going to raise around 1.7 billion USD if that's the pricing that comes through. So it looks like for all the worries and all the concern and all the hand-wringing, it is going ahead. It is happening. It might not be as hot as some of the other IPOs we've seen in Hong Kong earlier this year, but it was never going to be that, unless you can tell us a lot more about why that is. But right now it's going ahead. We should get the final price sometime during the day today. Okay. Well Lisa brought you in there just now, so I think it was the Backstreet Boys that said this. Tell us, tell us why. Tell us why, Lisa. Tell us why. Tell me why. Was exactly what it was. There we go. But yes, like like like you mentioned, um, you know, she. And at one point, I think in the heyday in 2022, when it was kind of labor, this big disruptor for the fast fashion industry and the global apparel industry was, you know, once valued at 100 billion. Now, uh, with the IPO guidance price looking to be somewhere between 25 to 27 billion and and really in the time since, you know, seeing the world has changed a lot. She and ultimately was a company built to take advantage of globalization. And now the current world that we live in, there's a lot more trade barriers, um, tariffs that have all hit the business. Um, it's also, you know, consumer preferences have changed a lot. And also, um, you know, they've dealt with a lot of image issues with accusations of, um, a kind of like, um, a lot of scrutiny around a supply chain, um, and child labor accusations and the use of cotton from the Xinjiang region in China. So these are all challenges that that she has had to dealt with in the last couple years as its valuation has plunged. But again, you know, I just want to put it into context, you know, in the most recent IPE in this pre IPO filings is disclosure of revenue about $42 billion a year, which still puts it among one of the top five global apparel companies. I think right now the big question, um, that investors are kind of looking at is that as we head towards the IPO is kind of, you know, um, you know, kind of what the growth potential and what the future holds for XI in there. Yeah. I mean, this is not the same, you know, big growth story that it was, right, as you highlighted the regulatory scrutiny of local tensions and whatnot. So what is the new strategy for growth for QIA now? Yeah, we've spoken to many company insiders and investors to get a picture of what she and is pitching on the road show to the IPO. And part of this new part of their new strategy they have is obviously, I think executives are acknowledging that the Shin brand itself can't carry the growth of the company, and they see this new path forward, which very focused on the supply chain. They want to make M&A and deals a greater part of their strategy. They want to bring on fire, um, you know, they want to buy brands or bring out other brands onto their infrastructure. So the idea they've pitched it kind of as the Amazon Web Services of fashion, where the idea is consumers may not see the sheer name, but in the in the fashion labels they buy. But she might be sitting behind, um, might be, might be the infrastructure in the manufacture that sits behind a piece of clothing. Again, this is a very new strategy that they've started pitching. And I'm in the lead up to the IPO. Um, and it's kind of still untested. One of the big, uh, ways we can see that might work is with their recent acquisition of Evaline, which, you know, everyone knows is a very popular US millennial brand that was actually built on a lot of transparency. And so the fact that she has acquired this company and wants to put this on its supply chain, and we will have to see how consumers take to it. And, um, and, and that will be a big test for its future growth strategy. Because next week is the is the big day here for she. And what are we looking ahead to then we have the pricing. How are we set up then. Yeah. So it's set to start trading on September 1st. Um, based on how things have gone and based on the pricing that we just heard, which was not at the top of the range, we probably shouldn't expect the kind of explosive first day that we saw on some of the eye names that have come to the market recently, and how the market develops between now and then, it's anybody's guess. There's a lot of geopolitics happening right now, but certainly this is something that a lot of people will be paying attention to. It is a large IPO, one of the five biggest in Hong Kong this year. So there will be a lot of attention, a lot of excitement around it. All right. Thank you. Our Asia Equity is deputy managing editor pens. There also are things that Lisa do who leads our Asia consumer and health coverage. Of course you should check out today's big day on the terminal. If you're a subscriber, read up on it. Of course, ahead of time prefers listing near the function, for it is any big tech that's also on Bloomberg.com. Well, putting more ahead. This is Bloomberg. Right. Welcome back. Just an update on the Bank of Korea. And as you can see, the one already reacted to the rate hike and then the changes to the growth forecast. They're coming out in the last few minutes. By the way just a bit of background, right. So the decision came out about an hour back. And since that point in time we've had details from statement and also this dot plot to what extent rates can still or do they still see rates going up. And the answer is yes. Um, it looks to be one, possibly two more hikes looking at where the dot plot is ending, where 3%, three and a quarter is where most dots are. There is, uh, a minority view that that it could get to 3.5%. Our folks have also chimed in. Um, yeah. They're basically said that the box is front lane tightening right now, given this AI boom that is really fueling the economy and giving them room to absorb higher rates. So they also think that, you know, it's second straight 25 basis point hike. Uh, that could continue. Right. And they do expect that policy rate to reach 3.5% by the first half of next year. Of course, we're going to have more from the presser coming up in just a few moments from Seoul. We'll have more on the way. You're watching a China show. Welcome back to the show second hour. We're looking at the China next here this morning. Half hour of the session. We're seeing it come out of here. Session highs I guess you could say, but it's marginal. A lot of the action is really in the Hong Kong space here this morning offshore just given I guess the Nvidia news is really helping some of the big tech players as well. There's been new models been announced when it comes to sentence time. Uh z AI minimax earnings as well. So a little bit more of that focus I guess in Hong Kong today. But yeah you know, it continues to be maybe a good news story, at least for for for Nvidia at least for now. I mean, I think it's the first time in a while we've actually seen the stock react positively to really blow out earnings. Yeah. Up 5% in the after hour session. And it's also probably the first time a central bank has had to consider a company's earnings. Right. So when Nvidia tells you at 70% of next year to be okay, needs to take that into consideration. We better hike, right. We better hike the front loading to hikes on the AI play. That's how you know that's according to our folks talking about that. They might need to even hike even more. Right. It's one or even two hikes even further given of course the the effects that's having, the positive effects that's having, uh, on the Korean economy almost perfectly on cue. Thank you so much. To my producers. They're 1 to 3% on the big Korea plays within that story. Uh, coming through, uh, the benchmarks, uh, you look at the index, of course, and cost be on the back of that very same point. Dollar one is on the stronger side in about 20 minutes or so we should be taking you straight to Seoul for the briefing. Coming through out of the blue. Okay, clearly things are okay at this point in time. Uh, pessoal, we have a central bank decision coming through out of the Philippines. And of course, I think two more in Africa, Botswana and Rwanda, are coming up with central bank decisions as well. Uh, okay. Uh, on the block decision, we talked about this early on. Here we go from our Bloomberg Economics team. Yeah. So front loading right. They say so they're saying right now we're talking about 3% for that policy rate. They still expect that maybe there's more room to go when it comes to this whole tightening cycle of 3.5% by early next year. So certainly that is their projections. We'll see what the governor has to say in terms of his forward guidance here. And yeah, that's on the back of of course, Jackson Hole that begins today, uh, over in Wyoming. And before Campbell washes speech. So interesting enough that they are moving ahead of what the fed could do, it could say, uh, let's talk a little more about the whole AI story. Obviously there's Nvidia, but then we got to talk about China ZTE has revealed it was behind that mystery AI model Ox Alpha, which serves the top of online usage rankings after outperforming rivals including Deep Sea. Outside, of course, Mohammed Bin Lo is here, along with our Bloomberg Intelligence senior analyst, Robert Lee. So yeah, they're the mystery mystery model here. Tell us a bit more about this model and what makes it so superior. Yeah, I mean it's really quite phenomenal. If you look at the statistics on the open road leaderboard, it searched at the top of the ranking and it just overtook all the rest by a huge margin. And that was when it was released anonymously. So nobody knew who was behind it. And they managed to gather some feedback anonymously. They were all quite positive. Um, and the company now says that they, uh, launching the official model was renamed to Glenn five. Uh, Glenn 5.3 flash. Um, they are also still releasing it for free for now. For one week. They haven't announced what the pricing will be thereafter. Uh, but certainly there is, uh, of course, a very high expectation rate, especially, uh, considering the pace of the model releases so far on the website, I have said that this is a frontier model without frontier pricing, and it says that it's benchmark, uh, when it comes to all the performance, uh, gauges is close to matching uh, in tropics opus 4.8. It sounds like something coach would say when you're trying to sell you the band. Um, Alibaba and the smaller, cost effective AI model. Yeah. So we previously reported on that quaint Queen 3.8 Meg. So they released the flash model, which is a lighter weight, a smaller model, just about, I think about 125 billion parameter. So it is smaller, more efficient, and it would likely increase the adoption rate for small and mid-sized enterprises that may not be able to afford the huge giant, uh, 2.4 trillion parameters model. So this is, uh, just something that was expected Usually after a max version is released, they would often release the smaller version. So again, uh, expanding the stack of uh products that Alibaba has. Okay. Um, tell us a bit more about when it comes to minimax. I mean, obviously this is a big one here in terms of the earnings side of things. The stock has actually been up as well. Yeah. So the earnings uh, came through in the first half. Revenue was almost quadrupling. Um, and net losses though I was looking at the numbers. You compare it year on year for the first half is actually on par or just slightly narrowing if you look at the first half. But then you look at the projection for the full year, uh, and is are expecting the losses to double year on year. And this is in the back of its research and development costs. And of course, uh, Robert Lee, I think I'm sure he would have more to say about the inference, cause he's expecting that to balloon over the next three years. So you can see here, if you look at the absolute numbers, you can see the net income is almost triple of what they're taking in and revenue. And the EBITDA margin is still deeply in negative territory. So that is again a concern when it comes to the monetization of their models. Rob, I'll bring you in on this then. So obviously the company's going. It's not profitable. Um, which which side of the coin should I be looking at more closely at this point in time? Okay, there's the the sentiment, which is often a driver for these small cap names. Um, so we can deal with that separately. But on fundamentals, again, as my men said on the reported headline numbers. Um, there appear to be some improvement, but, uh, there are some fair value adjustments, some nonrecurring, sorry, some. Yeah, nonrecurring one time stuff that needs to be stripped out. So if you look at the clean underlying profit, uh, the loss last year was close to 148 million USD. This year they've just reported 325 million. So the underlying loss, the ongoing loss within the business has more than doubled. So that isn't apparent if you just take the headline numbers. Uh, and also whilst men and women said, uh, you know, to be fair to them, there is strong top line growth, albeit of a very limited level. Um, the rate of expense growth will outstrip the top line. So I think consensus is looking for around $600 million loss this year. That is likely to widen. Um, because again, don't forget the pricing on tokens is below costs for most of these companies. It's at least an 80% discount to the US peers, and therefore rising gen tech use will actually cause the loss to widen. So, you know, stronger top line growth. A lot of talk on the call last night about their technology. You know that's all great. But it's hard to see where the route to profit is going to be. Losses will widen going forward. What about deep seek? Um reports saying that the revenue could reach, what, 70 million as of July? What what do you make of that? Um, it's moving in the right direction. But then let's look at our friends at anthropic and elsewhere. They're in the billion dollars range. So it's still is is peanuts. I mean, without being too disparaging. Um, so and I think, again, take a step back with deep seek. I think that primary motive has been to support China's national rollout. They are, you know, a leader. There are national champion. So they are there to pursue the boundaries of technological performance. You know, really they are the leading company in terms of cost them all. That's brilliant. But they're there to support the national objectives, not necessarily to maximize profits. So yeah, there is revenue coming through. But again, compared to the closed source models in the US it's very, very low. And just a thought on or several thoughts on the new models that have been been released. Is that a no known. How should we be looking at that. Okay. So I mean, uh, paraphrase or whatever the what the company had said on the back of it, what was it like, frontier, uh, model performance without the pricing? Yeah, actually, they're giving it away for free. There's a one week discount. There's no token charge at all, so no wonder it's popular. Now again, a little bit cynical that. But this is a one off promotion. They're literally giving it away for free for a week. Um, and what we need to do is wait and see how the performance of this model ranks in terms of global rankings. You know, probably be up there, but I don't think it's going to push the boundaries. Uh, and also, don't forget when the 5.3 model was originally released in, um, June to much fanfare in a subsequent months because companies are continually leapfrogging it, it, uh, fell from a top ten position down to 27. So it's very difficult for all companies to maintain a sustainable or to to develop a sustainable competitive advantage in this very fragmented sector. Tim. Thank you, Robert Lee there and Min Min Low of course, on the latest across AI stories across China today. Right. Uh just ahead here on shows. So obviously Nvidia earnings are still being felt quite strongly across the Asia Pacific. One simply has to look at some of the big moves across these big names here in the region. Uh, Edward Chan will be joining us from you, Ray, in a couple of minutes here to take up his take. And what the investment take really is. And you know what? What do you buy given the guidance coming through, coming through of the C-suite, uh, of Nvidia. Lots more ahead. This is the China ship. Right. Welcome back. So U.S. futures are up in via Nvidia after hours. Uh, the breakdown of the revenues. So you have two main components. Of course if Nvidia it's 96 be in total the bulk of that over 90%. It's in data centers that split between hyperscale and the rest. Both are growing over 100% each. And Nvidia's not telling us that in the next fiscal year that we are expecting to grow 70%. And that's a low number compared to some of the constraints they have to deal with to come up with their with their growth. Yeah, I think it wasn't just the fact that they beat and they raised. I think, you know, it's really what we heard from the management side of things, right? When they're telling investors that this I demand remains insatiable in some ways. Right. It's not really about the demand picture. They're saying if we if we had more supply, these numbers would be even bigger. Right. So this is why you're seeing the story of saying that the puppy is off to the races as the over revenue growth crushes expectations. You have Evercore ISI also saying the results of the expectations are really on most of the key metrics as well. And city coming out with a line there about the better than expected results. Yeah. There we go. Um, amidst of course robust half, I would imagine. Yeah, Buster. High demand strength. Okay. Joining us here on set Edward Chan portfolio manager senior investment analyst at Mirae Asset Global Investments. Uh, how are you looking at these numbers? I mean, if you look at the guidance for next quarter, it's really not that far ahead from from the street expectation. But it's really the fiscal 28 guidance for full year revenue, the number that sort of blows the expectation out. Right. So I think that that is quite a gap from, you know, what market was looking at coming into this quarter. And it just shows you that the strength of the the cycle and the backlog and the sort of supply chain constraint that we are under today. But it also, I mean, it's interesting that the numbers are still, you know, blowout. But when you look at the competition, it's intensifying, right? When they have their own customers are also coming up with their in-house chips as well. How do you think that changes the dynamics on who really becomes a winners and losers in this whole AI race now? Yeah. So clearly every big CSP and big company is trying to do their own project. Right. And this project have gone from, you know, relatively very small a few years ago to now also sizable clusters and a sizable wafers at TSMC, right? But I think Nvidia will hold their share in the market just because of how strong they are in terms of the total system design and then the large clusters that they they have for performance in the training, um, scenario. So I think for, for those advantage, they will still hold and their market share will be quite steady going forward. And what's the investment implication guys let's bring up 3006 please. That's the ETF uh that Edward helps run. So what does one buy. How do we change our allocations to two? I know of any move. I'm still very, um, bullish on on Nvidia and also on TSMC. Right. Because I think right now we you don't really worry about the semiconductor results because the supply chain is very constrained and demand outstrips supply. Right. And so you can see that for the next few quarters everybody's scrambling to increase the capacity. So I don't really worry about that. Right. But but the stock trades sort of have some volatility in between that because I think the market is looking, you know, further out into like TSMC said, they're looking at their customers. Customer. Now the market is looking at, okay, whether the AI labs can really pay for for all of this. Right. Yeah. And I think that really comes down to do you believe in one in scaling law, whether continuous scaling of the model parameters of the training cluster does bring you improvement in model. And we've still see that it's not it's not slowing down the model still improving, you know with larger parameters and training clusters. And the next thing is the stronger model bring me higher revenue inference revenue. And we are also seeing that as well. Right. The inference revenue are growing um very rapidly. But I think that the issue is when everything becomes so big. And then when you're tracking these, you know, inference revenue at a very high frequency, it's sort of, you know, and with the leverage that that was in the market. And then it brings you that volatility in between. Does that mean your preference is still towards the hardware side of this whole story? Or how do you make a software now? Yeah. So I, I my top holdings are between the hardware and then the KSP okay. Because KSP with all the investment like like I said, I think when I said last time here that I think the revenue will definitely accelerate. And that is the trend that we're seeing right. Um, that with that investment, with your capital intensity going up, your revenue have to accelerate because now the inference compute is very profitable, right? You know, they get their cash back Amazon in three years. And then I think for the labs much much faster. So the inference compute is profitable. It's not a question of whether of the compute is profitable or not is it is profitable today. That's why they're they're doing everything they can to to add capacity. And is the investment strategy still I guess to the point you just made, is it mainly to fund a CapEx story? How how well do we now understand it at the end of this? If you think about it, we're simply buying the people building the condominium and all the things that go into making it a very, very fancy property. How well do we know the end user and whether or not they're going to be willing to pay that much to buy the condo? Yeah, I think there's a crazy analogy, but yeah, there's two component here, right. On one end, you're burning a lot of cash doing the training of these models right on the other end. Now finally we're we're start to make make some money back from the inference. And if you look back at a year ago, the revenue you make from inference is really way too small compared to the to the investment you have in the training. Okay. But today, actually inference revenue have gone up so much that a lot of the leading lap steel, their economy is looking a lot better. Not profitable yet though. But they are able to fund a lot of their investment on this. On the training side with the inference with their capital, with the cash flow from inference. Right. So I think that will constantly be a sort of game here because, you know, if you believe in the scaling as the model get bigger. I mean, your investment just have to grow, right? The larger parameter model just have to train on a much larger cluster. And this cluster just cost so much more than what we have today. So and then the question is just on the inference side, you know, how fast you catch up to that, um, investment that you have on this end. Right. And I think that will be lumpy. You can't expect like a straight line up of, you know, inference revenue that'll be lumpy. And when it's lumpy in between, this sort of freaks the market out in that process. Right. But when you when you really believe in that, have to believe that the, the larger market of inference, I mean, of much higher intelligence that is available should be, you know, the ceiling should be very high and we're not nowhere near that ceiling. And that's why I know you have. Obviously, you said the hardware semiconductors is still something that you have strong conviction. What about where does the China tech story fit into, of course, your fund and how you look at this whole race now? Yeah. So I think the China for the yeah laps, the competition is a little bit more intense than the US in the US. You could argue that maybe there's two clear leaders in the lab where you can say, okay, I bet the chances of them surviving in the next three years or four years is relatively high. But in China, I think it's a different case where you have, you know, maybe 4 or 5 laps. They're still in the game. They're still competing to launch the best model here. And I think in that, that case, the competition is a little bit more intense. And also, I mean, you should think about the funding situation in China is also harder, right. Versus the US, just in terms of the relative scale of the company versus the US, how much fun they could raise here. So I think for the China labs it's just a harder game, a much more competitive game because model companies are relatively closer to each other. And then, you know, 1 or 2 models that you fall behind, right? Your ability to raise funds just drops off drastically. And that affects, you know, how the company's chances of surviving? I think so I think it's just a trickier. Um, it's a different equation. Yeah, yeah, it's a it's a trickier place to navigate. Yeah, yeah. Well I mean the the difference is in, in China the models don't have the, the big brother of Nvidia on their balance sheet being able to help finance some of that. Well I guess the question I want to get to is is the investment thesis. You need to have two separate strategies to bet on I. So one is a global one and one where is a separate China one that still beats an I, but it's just a different set of parameters that one needs to consider on both strategies. Yeah, I think on China, like I think it depends on which part of the supply chain you want to bet on, right, for AI. But overall, you know, I think you just have to be a little bit more nimble just because the competitive landscape might not be as straightforward as the US. And that means more of the OG, I guess, basically forms the ones that have the deeper pockets, the ability to find in, you know, fundraise and the like. I mean, is that where your preference lies still I think increasingly. Right. The, the, the traditional sort of CSP, you know, whether in China or us are sort of becoming a cloud or infrastructure provider because they are not getting that leadership in the front end. Yeah. Model. And that's the same in China and in the US. Right. And I think that it's sort of the fallback plan of a, a lab is to become a meal cloud. Basically if you if you're not able to for the rented out. Right. If you're not able to get to the the best model that runs on my compute because compute it's in such shortage. Right. So I think that's that's a similar situation in both the U.S. and China. One last question. So I think we during the break, you mentioned the market going into this wasn't reacting across the board positively to the results. Yeah. What is that reaction function telling you about where we are here in this cycle? I think that goes back to the what we discussed. Right. Like the investment you have in inference and versus the cash you could generate from sort of the investment you have in training versus the cash you generate in inference. Right. And I think I don't think the market is super confident about that. How long that that could go, you know, into the future. Right. Because if you look at the multiples of these semiconductor companies, I mean, Nvidia after the result is trading at well low teens P for P. And then, you know, all across the board all these semiconductor companies multiples are being, you know, very low compared to the historical average. What was that tell you that tell you the market is concerned about the cycle right. All right Edward, it's always great to have you. I would check their portfolio manager and senior investment analyst at Murray Asset Global Investments. Coming up in silico medicines. We're talking about earnings. Their first half revenue jumps almost 300%. In just a few moments. We'll get the outlook from the CEO and find out how robotics and I are changing the way they operate. Oh okay. Well okay. Um. Awkward pause. Well, he thought he thought we were going to a break, but we're going to live pictures out of Seoul, makeup career. There we go. Um, I was waiting for the the curtain raiser sting here to get us into the K-pop sting to get us into the. Okay. Uh, okay, so a couple of things here coming through, um, out of the ongoing briefing. Of course, the background is to raise interest rate for a second time. Inflation was the most important consideration. It was not a unanimous decision. It's worth pointing that out. Of course, there was one member that, uh, voted to hold interest rates. Uh, and this really looks even forward in terms of the front loading that they are now looking to do. So they hike rate hike rates twice, and the dot plot suggests before the end of this year into early next year, we could see one possibly at two more. And it's this chip story, this chip boom, improving incomes to support the growth, which is perhaps pushing them to lean on the more hawkish side of things. So I don't know Punjab. So. Okay. Uh. Welcome back. Uh, just some information based on some of our Bloomberg sources here. This concerns Malaysia, and they are now weighing the possibility of delaying, uh, these elections, national elections, to be more specific here. Um, he said to be considering a snap one as soon as this October. Uh, but so far, I'm just going through the details here. Nothing much, but it looks to be more incremental in the timing here. No final decision has been made. It's also, uh, key to note here. Right. Um, let's have a look at Southeast Asian markets, too, as we look at this story. And, uh, we're just trying to ascertain as well to what extent then this is going to be delayed, if in fact, that is the path that they eventually take. It just becomes Southeast Asia. Right? We've had also central bank decisions here in this part. Indonesia. Uh, Philippines is coming up later. Uh, today that market, as you can see, just getting absolutely clobbered. Uh, right now, is it actually trading live? Is my question there? We're up. We're down about 102 points anyway. Uh, lots more ahead here. Coming through on the China. 11:29 a.m. and Tokyo Japanese market to hand out lunch break in just a moment. Uh, we are seeing a little bit of wobbles when it comes the Nikkei, but the topics is doing a little bit better here today. 159 levels. Uh, we're back above now when it comes to dollar yen to 90 for your JGB yield. Uh, but yeah, we are checking, for example, stocks like Kiyoshi out here. Uh, a pretty interesting story about how they plant a new chip fab in Japan in order to meet with that eye memory demand. So the stock is surging some 6% right now. Yeah, this story is showing up still consistently and just about across the board. The story I talk about is the individual story and the insatiable demand we're seeing, only held back by the ability to secure supply and components, a lot of which comes from this part of the world that goes into the story across the Asia Pacific. So that's the Japan iteration of that. The Korea iteration is the market place to be. Okay decision, which it really has. And this is not a stretch of any by any measure a stretch of the imagination. Right. The I story in the individual stories playing out in that great decision, uh, that they are laying out right now, half of 1% of the upside it index on your screen's left most side, 1.5% to the upside also coming through with some strength across Asian currencies. Right. Let's have a wrap of the Asia the Chinese earnings stories right now. A lot to tell you about before we get into In Silico, I think we have a few things to tell. Oh, we're going in a okay. Why not? Um, AI driven drug discovery firm in silico medicine. As you can see, we're now caught at 1% to the upside. That's the spice. And the reason I frame it that way is a nearly 300% jump in first half revenue. Joining us exclusively is the company's founder and CEO Alex Javier, on joining us right now. Very good early morning. Thank you, by the way, for getting up a few hours early hopefully than usual for for your time of the day. Uh, the market doesn't seem there seems to be a at least a disconnect today between the reaction and the share price and what you guys reported. I also understand there might be some concerns around how recurring the revenue you just realized is, in fact, moving forward. Just frame frame your situation for us properly. So, sure, we're very happy to be reporting our first half of 2026 results. Uh, and for the first time, we've demonstrated, uh, pretty significant profits. Uh, so the revenue jumped to over 106 million, predominantly fueled by multiple collaboration deals, with almost one a month. Uh, and I also asked about licensing. Uh, so we managed to license several, uh, therapeutics. Uh, also, uh, the I revenue is, uh, going up. So we start, uh, um, or producing deals with, uh, other I companies are Frontier Labs that, uh, wanted to become better eye for science. Uh, and we booked, uh, over $35 million in profit, uh, in terms of sustaining this, uh, profitability, also sustaining this trajectory. Uh, we are very optimistic, uh, because more and more deals are coming through. So you can see that the, uh, sentiment, uh, to uh, is still iQOS, uh, capabilities is increasing because we are delivering on the promise of, uh, better, faster, cheaper, higher probability of success, uh, and more novel drugs. Uh, and we also are, uh, uh, very optimistic about our business in, uh, longevity biotechnology, uh, going after, um, therapeutics that target both aging and disease at the same time. So think about like GLP one, uh, which probably would be useful for pretty much everyone, uh, at some point in time in their life. So we want to treat everyone, uh, in the world as a patient because everybody has aging. And, uh, of course, currently we have this minute, uh, uh, increases in revenue, etc., but our goal is to build trillion company because, uh, if you are addressing a medical need that everyone on the planet has. Uh, the market is vast. Uh, that is the real, um, kind of electricity that does the real, uh, value, uh, giving you additional years of life, uh, to enjoy this wonderful future. You mentioned about AI a few times. in that answer, Alex, I got to ask you how AI is really kind of changing the business in some ways, right? I think you said in an interview recently about how you've been asking more about know about Evangelia, a retraining and really kind of telling some of your scientists and software engineers to kind of shift their roles in some ways and working differently. And you said, you know, you have an organization of 400 people, uh, you can displace 40% easily on the software side. How have their roles changed, and really, what sort of productivity are you seeing now for the business? Sure. So are I. Is changing pretty ever or pretty much every job right now in a very profound way. Uh, and uh, the most, uh, um, uh, interesting jobs that are being kind of augmented or displaced are in coding. So I is really great at coding. So if you were a frontend developer. Uh, or a medium developer? Uh, now with AI, you can be a full stack developer, so you can actually go M20. And if you don't know how to do this, you can easily, uh, ask one of the foundation models to teach you. So, uh, you can very quickly learn. So right now I'm dialing in from Abu Dhabi in the United Arab Emirates, where we have over 60 people here, um, uh, predominantly on foundation modeling. And, uh, I offer science. Uh, and here we of course, do have, uh, you know, the entire software stack. Uh, biology 42, chemistry 42, medicine 42. Those are frontier tools that allow you to very rapidly, uh, discover and, uh, develop therapeutics. Uh, and we also provide the software to the market. Uh, now, I'm speaking pretty much with every one of the team members. Uh, uh, instead of, uh, you know, thinking about how to reduce staff, I'm thinking about how to augment their capabilities So they become an army of one or an army of two. Uh, so you should expect many more products from us. Many more, um, uh, also scientific breakthroughs, because now, as, uh, uh, I develops, it allows individuals to become researchers who can become a lab of one, uh, and I well, I don't like to put them in the kind of teams of one. I like to pair them, uh, because you also need to have some, uh, level of, uh, expert biological, uh, or chemical, uh, domain knowledge, uh, in order for them to actually do more. Uh, so we are not firing anybody, but we want to ensure that the productivity per capita increases dramatically. Uh, and also, uh, I'm explaining to them why they need to work for in silico and, uh, not anywhere else, because, um, many frontier labs, they start their presentations with how they are going to change drug discovery. But in reality, where are the drugs? Right. So you can promise the world that you are going to double life expectancy or increase or cure all diseases on 5 to 10 years. But actually, those promises are very often, um, backed with empty, uh, pipelines. So you actually need to discover a drug in order to know how to discover a drug. Yeah, but. Well, so, Alex, how do you how do you protect the business model then? Uh, because you also mentioned. And I think some people should know this too, about the business is that you not only develop the pipeline itself. Uh, you also share, I would imagine, part of the software to your peers in the industry and, and how are you able to do that but protect yours, your secret sauce, or do you think this is where the industry is eventually headed and your peers in the industry are using this technology? Uh, what's a more important part of your business? I think it's my my key question is, is it the pipeline or is it the underlying I. Sure. So we have kind of three pillars of silica. One is I and the other one is uh, therapeutics. And the third one is longevity. So again, we are kind of uniting, uh, those two areas by focusing on therapeutics that work on aging and aging and disease at the same time. It's a very unique, uh, combination. And, uh, our ultimate moat is the ability to consistently deliver novel, uh, scientific breakthroughs in both AI and, uh, therapeutic, uh, area as we scale in, uh, therapeutic discovery. Uh, we also get the ability to experience this, uh, genuine scientific serendipity, uh, where you just stumble on something, uh, which is a genuine scientific breakthrough. I'll give you one example. Recently, we've identified, uh, a really novel mechanism, not just a target or a molecule. New mechanism for pain, uh, providing potentially the pathway to non opioid uh non anti-inflammatory drugs. New class of drugs that uh when injected worked better than the morphine. Now very few things work better than morphine. Uh, and uh, the only reason why we actually have this program is because we could scale our pain assays. Uh, and could do a little bit more experimentation in order to make this discovery. So I think by scaling drug discovery, uh, in many therapeutic areas, focusing predominantly on age related conditions, uh, that gives us the ultimate mode. And I, uh, you should expect I to change in a very dramatic and profound way all the time. So new models will be coming up in the weeks. Uh, so you shouldn't, ah, consider that, uh, to be your ultimate market. Uh, I is fluid, but, uh, drugs are like diamonds. Diamonds are forever. And that's what we need to treasure and deliver, uh, to the market at scale. Uh, and as we scale this year, we demonstrated that we could. We broke our own record nine drugs in nine months. Uh, and some of them are absolutely novel. Some of them progress into human clinical trials. Uh, and I'm, uh, we believe that, uh, it's kind of a rat queen hypothesis, right? So, um, you need to be running faster than everybody else just to be able to stay on the same place. Uh, and, um, uh, we are developing new frontier AI technologies. Soon. Hopefully, you'll see some really big papers from us in this area. Uh, and, um, uh, we shifted to a new AI paradigm where instead of just providing software to the market, uh, we are building benchmarks. So evaluations that come from our own therapeutic programs that help us, uh, test I at the expert level so we know in which tasks I perform is really well and on which tasks it can still be augmented. And in order for you to get to this wonderful point called developmental Kanner, they'd actually proudly, uh, wear this badge where we track the number of developmental candidates, uh, kind of one step before human clinical trial. Uh, now we have 33. I have to update this page, uh, soon. Yeah. Uh, every time you go to a developmental candidate, you generate 1.2 thousand benchmarks. Uh, so 1.2 thousand skills have to be tested. Now we know how to test done. And we are developing frontier models that outperform everything else in the world in those benchmarks. Okay. Um, tell us about that. Okay, so you mentioned you you broke your own records. If I'm not mistaken, you mentioned nine new drugs in the pipeline. Does that scale up realistically exponentially because of what you're doing it on the I front? I think part of the question is, is it still in the preclinical stage where you are getting the most Bang for your buck in terms of I being able for you to broaden your pipeline. Uh, I love your questions because they're kind of wise. Um. Uh, yes, I deliver is, uh, the most bang for the buck in the preclinical space, because that's where you can accelerate, like, accelerate like a Ferrari. We can cut approximately two and a half to three and a half years out of the, uh, four and a half year cycle that usually takes you, um, in the traditional, uh, paradigm of drug discovery with AI. And also, by the way, with China, because, uh, we need to very quickly experiment, uh, and, you know, synthesize the chemistry. Uh, that is why we have to be truly global and, uh, utilize China as a platform for discovery. It gives you additional two years, uh, and on, uh, if you go clinical, you are moving with the speed of traffic. So think of, like, owning a Ferrari. It can go from 0 to 100, uh, in just a few seconds. But after that, there are traffic signs. Uh, there is traffic police. And, uh, sometimes you are better off, uh, you know, driving a truck rather than a Ferrari. Uh, in those traffic conditions. That's why big pharmaceutical companies are usually better than us when we're in clinical trials. So now we have, uh, done drugs clinical, uh, for team. And yes, some are in phase three. So it's actually very, um, very promising, a very, uh, amazing time in the company history. Some are fully owned. Uh, but I think in order to scale, you need to try to fill out license as early as possible. Uh, to give the drugs to the true experts who know how to develop them in a therapeutic area, uh, where they also have the distribution channel. Uh, the connection with the principal investigators with a doctor is with the hospitals. Uh, and I actually do believe that it's possible to scale exponentially because many of the pharmaceutical companies are facing patent expirations. So they need to replenish their pipelines. Some of the truly blockbuster drugs that are driving, you know, 20 or $30 billion in revenue like Keytruda are getting off patent. So uh pharma companies need to replenish that. Uh, and uh, finally, the pharmaceutical companies realize that longevity is a really kind of the name of the game. If you want therapeutics, sleep, uh, muscle wasting, bone wasting, our hair loss, uh, skin, uh, ocular diseases, uh, central neural, uh, system. We are addressing all of those areas with novel therapeutics. And I think that the market is vast because until people, uh, uh, are still aging, while people are still aging and, uh, dying of old age, uh, we will have a market. So longevity doesn't get old. Longevity doesn't get old. I love that, uh, Alex, um, you mentioned about the I revenue that it's picking up. Tell us a bit more about the partnerships and collaborations you're having with the likes of Takeda. Rai announced that back in July. How is that going so far? I know they've been using your proprietary pharma AI platform, and should we expect similar deals in the future? So, sure, uh, many of those partnerships, including together, have evolved from, uh, AI partnerships, uh, that we have we've had before. So lately together, they've been utilizing our eye, uh, in their own R&D for a while. Uh, and, uh, as they get more comfortable with their technology, uh, they want to do more. Uh, and that's when they actually come to us and partner with us on real therapeutic programs, where in addition to I would deliver a drug. Uh, so actually, if you look at most of those really big collaborations, they are not about selling AI software. Uh, I software, actually. Most people overestimate this market. It's actually a very tiny market. Uh, when you look at just, uh, what you can get from on the AI and software component, the R&D budgets of pharmaceutical companies are actually pretty small, and you can calculate them. Uh, so only a small fraction of that goes into, uh, early stage drug discovery. I, uh, people tend to offer our estimate, but when you partner on the drug, you can generate significant value for yourself and for the partner and for the world. Because, again, at the end of the day, it's not I that there's treating people. Uh, these are drugs and, uh, um, doctors that are treating people, uh, and, uh, um, those partnerships have evolved from just eye partnerships to drug partnerships. What I'm extremely excited about are actually partnerships with other AI companies. Uh, so we probably probably have heard about our partnerships with liquid AI, where we help train Frontier Foundation marvels in many, many areas of science, mostly, uh, in drug discovery. We have partnered with, um, Human Longevity. We have partnered with down some. Right, uh, to, um, uh, augment their, uh, I capabilities in AI for science. Uh, and there should be more of those coming. So, uh, you should expect us as we, um, now shift from treating pharma as our target market to, uh, treating other AI companies of those as our target market, because frontier allows, you know, have a lot of money and they are competing for who is better in AI for science. So we are actually a perfect partner for all of them. Alex, this sounds like very exciting stuff that's going on. Um, beyond just the pipeline. We really appreciate the time and all your insights. Alex Zamorano, co-founder and CEO at In Silico Medicine. I'll play more ahead. This is Bloomberg. Well. Chinese President XI Jinping has called for rescue efforts after a deadly flood on the border with Nepal. Now, a warning that's to our viewers are that you might find these pictures a bit disturbing. At least 100 people have been killed and hundreds more are missing after a violent flash flood in the area. You're looking at the moment when the waters of mud tore through a checkpoint and surrounding villages yesterday. Let's bring in Swati Pandey. She leads our South Asia economy and government coverage and joins us now. Um, heartbreaking pictures to say the least. Swati, just bring us up to speed on. What's the latest on the rescue efforts now? Yes, Yvonne, uh, the situation is moving quite rapidly. The search and rescue team is, uh, looking and kind of trying to reach out to tourists in the region and, uh, figure out the total, um, if the numbers we have are changing. So I don't want to give a number, but hundreds of people are missing. Uh, more than 150 are dead, and, um, and and, uh, there are there are fears of the casualty number would increase further from here. What actions are being taken right now? What do we understand about the response? Um, look, um, different countries have offered, including India, uh, which enables Nepal, uh, and the US, um, they have offered support, uh, to Nepal in search and rescue and also to provide, uh, food and other sort of relief and aid, uh, that will be needed, uh, in times like this. Um, it's it's still very early days, as you know, it only happened, uh, yesterday. Um, uh, we are still trying to estimate how many people are missing. Um, how many people have died? Um, and Nepal relies a lot on tourism. Uh, there are a lot of people who have started visiting the, um. Um. Oh okay. Last month are over area which was opened in Tibet. Um, as, as part of improving India-China relations as well. And that area has been affected too. Um, and um, so so for Nepal, it is it is a big, uh, big disaster. Uh, this will be a big test for the new prime minister as well, who came to power after Gen Z protests last year, remember? And, um, and and how things go on from here in terms of disaster management, in terms of, uh, improving infrastructure, power lines, roads. Ah, will be a big test. Swati Pande either. Thank you so much for getting us up to speed. She leads our South Asia economy and government coverage. We will be taking a very short break. Okay. Uh, currency markets is, uh. Southeast Asia is roughly on offer. A stronger dollar story there. Stronger. One story against the dollar, of course, given the, uh, all the developments coming through out of the block this morning from raising interest rates back to back now, uh, and guiding for even further 1 or 2, two, possibly, uh, looking at a six month flat. So just keep that in mind, of course, would be trying to ascertain where the rate story goes there. And later today, we understand inflation remains a key concern and challenge for the Philippines. They have the right decision coming through as well. Uh very. Yeah. It's interesting. Um, the governor spoke at a Senate hearing just hours before that policy decision. So gave a little bit more, I guess, for guidance on what they're looking at here. But they said they stand ready to take measures to fulfill its inflation mandate, and they're ready to act versus inflation. So they did talk about their concerns around that. Um, and yes, recent inflation data has been somewhat encouraging, they say, but the inflation rate remains well above the 3% target now. I mean, where is it not? Um, when you look at the U.S. story and what happened overnight and why yields there split the page plays on a two year yield. Actually, uh, went up a little bit as we came into the Asia morning today on the back of the PC numbers, which, by the way, we haven't really talked about, uh, the story though, is offsetting most. We're up there and of course coming through as well. Chinese tech names Triple Minimax and Baidu and Alibaba are also seeing some very nice gains. Lots more ahead. Thank you for joining us today.