Summary of Key Points
MiniMax's stock price once tripled due to the rapid growth of its B-side business (open platform revenue increased by 197.8%) and its technological advantages (the model has been deployed by companies like Google and Azure). However, recently, the stock price has halved due to factors such as the cooling of interest in the "lobster" concept and competitive pricing strategies. The company is currently facing three major challenges: in the short term, it needs to handle the significant selling pressure from the large-scale share lock-up in July; in the medium term, it depends on whether the new M3 model can drive both volume and price increases for its B-side business; in the long term, it must maintain a decent gross margin during price wars and use financing from the Sci-Tech Innovation Board to reduce costs and reach a profit turning point. The market has shifted from focusing on technical innovations to evaluating commercial outcomes, and investors should wait for clear signals before making any investments.
Detailed Analysis
1. Short-term Warning: The July Share Lock-up Is a Major Challenge
Only 5% of MiniMax's shares are currently tradable, and 46.44% of the shares will be released in July, which means the number of tradable shares will increase by tenfold. Early investors bought the shares at a price significantly lower than the issue price, resulting in a more than two-fold profit. These investors are likely to sell their shares to realize their gains. Even if MiniMax is expected to be included in the Hong Kong Stock Connect in August, allowing mainland Chinese investors to buy its stocks, the surge in supply will put significant pressure on the stock price, making it difficult for the price to stabilize. Therefore, any recent stock price rebounds are more likely due to short-term speculation rather than a real turnaround. It's advisable not to rush into buying shares before the lock-up is fully lifted.
2. Medium-term Crucial Point: Can the M3 Model Encourage Higher Prices from Customers?
The growth of MiniMax's C-side business has slowed down (growth rate dropped from 181% in Q4 2025 to 82%), and prices have increased (the lowest package cost has gone from 29 yuan to 49 yuan), which may lead to customer loss. The B-side business needs to take over, and the M3 model is key:
- Technical Advantages: M3 is the first open-source model in China to offer programming capabilities, a long context of up to 1 million tokens, and multiple modalities, with performance comparable to that of overseas giants (e.g., its coding capabilities surpass those of GPT-5.5).
- Price Issues: M3 is twice as expensive as the previous generation and three times more costly in scenarios requiring a long context. While it represents a high-performance alternative for compliant companies, domestic competitors (such as DeepSeek V4) have reduced their prices, making M3 less attractive to cost-sensitive businesses.
- Verification via the Mid-year Report: The focus should be on two indicators: B-side revenue growth (whether it can maintain high levels) and gross margin (whether price increases are accepted by customers). If both improve, it indicates that M3 is successful; otherwise, the company's hopes for B-side growth will be dashed.
3. Long-term Survival Challenge: Price Wars and Financing
MiniMax has not yet turned a profit, but its losses are narrowing (net loss in 2025 was $282 million, less than in 2024), and its gross margin has turned positive (25.4%). To become profitable, it must overcome two major hurdles:
- Price War Dilemma: If competitors lower their prices, MiniMax may lose customers if it doesn't follow suit, but reducing prices will lower its gross margin. It needs to prove that its model is irreplaceable in long-context and multi-modal scenarios or reduce costs more quickly than its competitors.
- Financing Costs: Listing on the Sci-Tech Innovation Board does not guarantee immediate profits, but it can provide access to cheaper funding (A-share markets typically offer a premium over H-share markets), which is essential for research and development and operations. If the premium from the Sci-Tech Innovation Board is insufficient or financing fails, the company may face difficulties, including potential loss of key talent due to lack of attractive returns.
4. Fundamental Concerns: The C-side Business Is Weak, and the B-side Must Take the Lead
Currently, 67% of MiniMax's revenue comes from the C-side, but the growth rate has slowed down significantly (halved), and price increases may further affect customer retention. Although the B-side business is growing rapidly (197.8%), it only accounts for 32% of total revenue. Therefore, the M3 model is crucial; if it fails, the company's growth will stagnate.
5. Investor Guidance: Don't Rush to Buy Stocks
Investing in MiniMax currently carries high risks. Investors should wait for three clear signals before making a move:
- Short-term: The selling pressure from the July share lock-up subsides, and the stock price stops falling.
- Medium-term: The mid-year report confirms the effectiveness of the M3 model (high B-side revenue growth and increasing gross margin).
- Long-term: The company maintains a competitive price advantage during price wars and successfully secures financing from the Sci-Tech Innovation Board.
Only when all these signals are met is it a good time to invest. Otherwise, any investment is more likely to be part of short-term speculation and could result in losses.