Broker: UOB Kay Hian
Date of Report: 30 July 2025

China AI Revolution 2025: WAIC Unveils Next-Gen AI Agents, Market Leaders, and Investment Opportunities

Introduction: WAIC 2025 Sets the Stage for a New AI Era

The World Artificial Intelligence Conference (WAIC) 2025 in Shanghai marked a pivotal shift in the Chinese AI landscape. This year’s focus moved decisively from large language models (LLMs) to AI applications and agents, highlighting the transformative power of AI as it expands from the cloud to edge devices. Tangible, embodied AI and empathetic voice interfaces are set to redefine human-AI interaction and productivity across China’s tech giants and emerging leaders.

Alibaba Cloud: Leading with AI Agents and Full-Stack Innovation

Alibaba Cloud took center stage at WAIC 2025, showcasing its comprehensive approach to AI agent development:

• Bailian Platform: Selected as the conference’s key highlight, Bailian is a full-stack platform for large model services and agent application development. It integrates over 200 domestic and international models (including Qwen, DeepSeek, and Llama), and offers more than 100 agent templates across diverse industries and tasks. Over 200,000 developers have created 700,000+ agents on Bailian.
• Quark AI Glasses: Featuring Qwen LLM and Quark’s latest AI technologies, these smart glasses support Gaode (AutoNavi) navigation, visual search on Taobao, and trip alerts through partnerships with Fliggy and Alibaba Business Travel.

AI Model Leadership:

• Qwen 3 Foundation Model: Recognized as the world’s most intelligent non-reasoning foundation model.
• Qwen 3 Reasoning Model: Matches top proprietary models such as Gemini 2.5 Pro and o4-mini.
• Qwen3-Coder: Surpasses proprietary leaders like GPT-4.1 and Claude 4 in coding and agent integration.

Adoption and Ecosystem: Qwen has surpassed 400 million downloads globally, with 140,000+ derivative models—making it the world’s largest open-source model family. Alibaba’s exhibition showcased a full-stack AI suite: Yitian 710 cloud-native CPU, Feitian cloud OS, HPN 7.0 AI cluster networking, AI Stack appliances, Tongyi Qwen and Wanxiang models, Bailian and PAI platforms, and applications like Quark and DingTalk.

Global Recognition: Alibaba International’s AI solution Marco received the prestigious “SAIL Star” at WAIC, supporting over 30 languages and 60+ e-commerce scenarios, handling over a billion daily calls.

Financials and Valuation:

Recommendation: BUY with a target price of HK\$165.00, implying 17.3x FY26F PE. Alibaba is trading at 12.5x FY26F PE, below its historical mean, with strong growth prospects from AI transformation.

Tencent: Multi-Modal AI and Everyday Integration

Tencent continues to push the boundaries of AI, positioning itself as a life companion, office secretary, travel planner, and content creator.

• Hunyuan Multi-Modal Model: The new Hunyuan 3D AI Creation Engine is the industry’s first one-stop, low-threshold tool for 3D content, boosting production efficiency. Hunyuan Image 2.0 delivers high-fidelity, millisecond text-to-image and image-to-image results.
• Yuanbao AI Assistant: Offers lower latency, more humanlike expressions, and richer emotional cues.
• Full AI Enablement: WeChat’s mini-programs, search, and WeChat Read are fully AI-enabled. QQ features the Xiao Q AI assistant for instant Q&A, illustration, writing, problem-solving, and file analysis.
• Enterprise Solutions: Enterprise WeChat, Tencent Meeting, and Tencent Docs act as AI secretaries, providing smart meetings and auto-generated documents across workflows.

Financials and Valuation:

Recommendation: BUY with a target price of HK\$650.00, implying 22x 2025F PE. Tencent trades at 18.6x 2025F PE, below its historical mean, and is well-positioned to launch consumer-facing AI agent applications via its Weixin super-app.

Kuaishou: Kling AI Powers Creative Expansion and Monetization

Kuaishou’s Kling AI platform showcased major upgrades at WAIC 2025:

• Smart Canvas: A next-gen creative workbench with unlimited visualization space, AI-assisted tools, and real-time multi-user collaboration.
• Multi-Image Reference: Ensures consistency in AI-generated videos by referencing multiple source images, delivering a 102% performance improvement over the previous version.

Growth and Monetization:

• Since Kling 2.0’s launch, Kuaishou has recorded over 45 million creators globally, generated 200 million+ videos and 400 million images, and onboarded 20,000 corporate clients.
• Kling targets US\$140 million revenue in 2025, with annual recurring revenue projected to reach US\$200 million by year-end. A premium “Studio Level” membership launches in Q3 2025, targeting businesses and power users.

Financials and Valuation:

Recommendation: BUY with a target price of HK\$80.00, implying 15x 2025F PE. Kuaishou is trading at 13x 2025F PE, with Kling AI and adtech upgrades driving a 21% EPS CAGR over the next three years.

Baidu: AI Developments and Global Expansion

Baidu highlighted its innovation and commercialization efforts:

• Flagship AI Technologies: Apollo Go autonomous driving, PaddlePaddle deep learning platform, and the debut of NOVA digital human technology. PaddlePaddle has attracted 21.85 million developers and served 670,000 enterprises, enabling 1.1 million AI models.
• Global Expansion: Apollo Go launched in Dubai and Abu Dhabi, with a partnership announced to integrate thousands of autonomous vehicles into Uber’s global network.
• ICV Operation Licenses: Shanghai issued China’s first batch of Intelligent Connected Vehicle (ICV) pilot operation licenses, moving from testing to large-scale commercial operations in smart taxis and intelligent freight.

Financials and Valuation:

Recommendation: HOLD with a target price of HK\$88.00, based on 8.7x 2025F PE. While Baidu benefits from AI cloud progress, concerns remain regarding ad revenue growth and the monetization of its autonomous driving business.

JD.com: JoyAI Powers Industrial AI Transformation

JD.com announced a major upgrade at WAIC 2025:

• JoyAI: The rebranded and upgraded Yanxi LLM now offers models ranging from 3B to 750B parameters, supporting text, speech, image, video, and digital humans. Dynamic layered distillation and cross-domain data governance boost efficiency by 30% and reduce training costs by 70%.
• Industrial Integration: JoyAI is fully integrated into JD’s supply chain, serving 1 million merchants and supporting hundreds of business use cases in retail, logistics, healthcare, and manufacturing.

Kingsoft: WPS Lingxi – The Native Office AI Agent

Kingsoft Office made a significant leap forward with the launch of WPS AI 3.0 (WPS Lingxi):

• WPS Lingxi: A native Office AI agent enabling document writing, presentation generation, and voice assistant functions using natural language and multi-turn dialogue—without switching apps. This marks a new level of productivity within the Office ecosystem.
• WPS Knowledge Base: To be launched with the WPS AI 3.0 update, further enhancing knowledge management and workflow integration.

Financials and Valuation:

Recommendation: BUY with a target price of HK\$47.00, implying 26x 2025F PE. Despite margin pressure from investment, Kingsoft is supported by robust revenue growth from WPS and Kingsoft Cloud.

Sector Outlook: Catalysts and Risks

Key Catalysts:

• Widespread deployment of AI-generated content (AIGC) to boost productivity and efficiency.
• Monetization of LLMs through integration with traditional industries.
• Potential relaxation of the US chip ban, improving access to high-performance GPUs.

Main Risks:

• Regulatory: Security and privacy concerns could prompt new rules.
• Financial: Heavy capex and R&D costs may pressure margins.
• Geopolitical: Limited access to advanced GPUs due to international tensions.

Conclusion: AI Agents Reshape China’s Tech Landscape

WAIC 2025 has set a new trajectory for China’s internet and AI sector, as cloud-to-edge AI applications and agents take center stage. Market leaders such as Alibaba, Tencent, Kuaishou, Baidu, JD.com, and Kingsoft are driving innovation and integration across every aspect of work and daily life. Investors should watch for the accelerating monetization of AI, evolving regulatory landscapes, and the transformative impact on productivity and industry value chains.