Daily Brief TMT/Internet: Z.AI, BASE Inc, Zhongji InnoLight, TSMC (Taiwan Semiconductor Manufacturing), MiniMax, Vertical Data, Hennge KK and more

• Z.AI (2513 HK) listed in January and is a member of the Hang Seng TECH Index (HSTECH INDEX) and Hang Seng Internet & Information Technology Index (HSIII).
• Following placements in July and September, Hang Seng is likely to conduct an ad-hoc rebalance in October to reflect the higher shares outstanding and free float for Z.AI (2513 HK).
• Buying from passive trackers will absorb some of the float and could help stem the fall following the 74% drop in the stock price in the last 3 months.

• SBI Holdings (8473 JP) extended their tender on BASE Inc (4477 JP) at ¥340 despite the tender having no minimum threshold. They obviously didn’t get what they wanted. Not close.
• That opened them up to expectations of a bump. For me, those expectations were the original base case but the stock didn’t act that way. Partial tender situations are funny.
• The next day, shares traded higher but still below ¥340. On Friday, things got more exciting. A successful tender needs to be higher (but SBI could attempt a backdoor trade).

• With free float not meeting the thresholds, Zhongji InnoLight (3308 HK) missed Fast Entry to all major local and global indexes at the time of listing.
• We forecast local and global index inclusions for Zhongji InnoLight (3308 HK) in a 3-week period starting end November that will require passives to buy US$1bn of stock.
• The passive buying is around 20% of H-share float and is partly responsible for Zhongji InnoLight (3308 HK) trading at a 13% premium to Zhongji Innolight (300308 CH). 

• Micron reported US$32bn of customer commitments, mostly cash deposits, with 75% of fiscal 2027 output committed and most 2027 HBM contracted above 2026 prices.
• Broadcom will lend Anthropic up to US$42bn as Anthropic’s IPO filing lists US$518bn of compute obligations against about US$4.6bn of 2025 revenue.
• Amazon bought a NT$1.59bn Gold Circuit stake, Samsung Electro-Mechanics is expanding substrates on reported NVIDIA prepayments, and phone makers cut memory demand 30% to 40%.

• We noted Space Bunny Alpha, a stealth model which is likely MiniMax’s M3.1-Flash, and compared its available benchmarking with Chinese and US models.
• We analysed the sequence of model launches and placements at MiniMax and its competitor Zhipu, and the release cadence of Chinese labs.
• We think the M3.1 launch is imminent and could be followed by a placement, and we review how the stock traded in past launches for MiniMax and its comparable.

• TSMC: +20.3% Premium; Rebounded from Our Long the ADR Level
• UMC: +3.4% Premium; Above +1 SD Band; Short the ADR Spread
• ASE: +5.8% Premium; Above +1 SD Band; Short the ADR Spread

• Vertical Data Inc. is an AI infrastructure solutions provider, assisting enterprise and data center customers in deploying artificial intelligence computing capacity.
• The company operates three platforms and acquired a 20 MW data center in Chicago in July 2026, with an agreement for a 4.5 MW site in Sweden.
• The company has suffered operating losses since inception, and its disclosure controls and procedures were not effective as of June 30, 2026.

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• TSE Prime Transition and Capital Raise Structure: The October 2, 2026 capital raise of up to ¥2.36 billion is primarily a compliance mechanism to meet the TSE Prime Market’s ¥5.0 billion net-asset requirement. While positioning the company for TOPIX index inclusion, the allocation of these funds toward marketing and recruitment faces diminishing marginal returns due to structural talent shortages and a highly relationship-driven mid-market.
• Unique Mid-Market Moat and SI-Driven Distribution: Unlike Western markets where cloud procurement is self-serve or direct, Hennge’s true moat is its deeply entrenched relationship with regional System Integrators (SIs) and mass-distributors like Otsuka Shokai and Daiwabo Holdings. SIs capture substantial margin but act as an impenetrable defense against direct sales models from global giants like Microsoft and Okta.
• M&A and Valuation Realities: Domestic cybersecurity consolidation is highly constrained by cultural resistance to acquisitions among Japanese tech companies and a severe shortage of capable middle-management. While Hennge has set an aggressive target of ¥20 billion ARR by FY2029, achieving this organically will require moving upmarket into segments dominated by Microsoft Entra ID and Okta, creating margin pressure as ARPU expansion struggles against large enterprise discounting.