Huatai Securities: Recommends focusing on two investment themes: AI applications and domestic models.

According to a report by Huatai Securities, the price reduction of GPT-5.6 has shifted the competition among large models from capability rankings to "equivalent intelligence cost." On July 30, OpenAI cut the prices of Terra and Luna by 20% and 80%, respectively; the next day, DeepSeek V4 Flash 0731 achieved a score of 50 on the Artificial Analysis Intelligence Index, only 1 point lower than Luna. The mixed price and average task cost were approximately $0.06 per million tokens and $0.03, respectively, which are about 65% and 57% lower than Luna. Huatai Securities believes that Kimi K3, with a score of 57, represents the strong capability upper limit of current domestic open-weight models, while DS V4 Flash sets a new cost baseline for the 50-point capability range. Chinese models have formed two competitive routes of "strong capability + high cost-effectiveness," likely driving the growth of downstream applications. It is recommended to focus on two investment mainlines: AI applications and domestic models.