Tencent 0700 04 (Oct 21 - Dec 26)

[winston]

not vested

<Hindsight>Brokers' Latest TPs/ Opinions on TENCENT After Results Ann

Broker│Rating│TP (HKD)
Daiwa│Buy│670->750
CLSA│High Conviction Outperform│710->740
UOB Kay Hian│Buy│650->736
Citi│Buy│699->735
Nomura│Buy│670->721
UBS | Buy | 710-> 720
Jefferies | Buy | 665 -> 706
Goldman Sachs | Buy | 658 -> 701
Morgan Stanley | Overweight | 650 -> 700
HSBC Global Research | Buy | 650 -> 690
JPMorgan | Overweight | 600

Broker│Opinion
Daiwa│Growth momentum continued
CLSA│Results significantly beat expectations
UOB Kay Hian│2Q25 results were strong
Citi│Quarterly results significantly beat expectations
Nomura│Online game business performed well
UBS | Quarterly results beat expectations; a re-rating on value is expected
Jefferies | AI potential was unlocked; the stock is confirmed as its sector top pick
Goldman Sachs | AI drove growth across all businesses
Morgan Stanley | Core business was solid, while AI delivered high investment returns
HSBC Global Research | Core business performance became stronger
JPMorgan | Quarterly results were largely in line with expectations; market is expected to maintain earnings estimations

Source: AASTOCKS Financial News

http://www.aastocks.com/en/stocks/news/ ... -news/AAFN

[winston]

not vested

Tencent's quarterly growth beats expectations on gaming demand, AI services

Tencent (0700) reported a third-quarter revenue growth of 15 percent on Thursday, as China's largest social media and gaming company benefited from strong gaming demand and expanding AI-driven services.

The Shenzhen-based technology company posted revenue of 192.9 billion yuan (HK$211 billion) for the three months ended September 30. That compared with the 188.9 billion yuan average of analyst estimates compiled by LSEG.

Gaming revenue rose 15 percent to 42.8 billion yuan at home and 43 percent to 20.8 billion yuan overseas.

Revenue from advertising rose 21 percent to 36.2 billion yuan, boosted by artificial intelligence that improved targeting capability.

Net profit climbed to 63.1 billion yuan, compared with a 57.3 billion yuan average analyst estimate, LSEG data showed.

Source: The Standard

https://www.thestandard.com.hk/tech-and ... le/316715/

[winston]

not vested

Broker│ Opinion

Jefferies│ Revenue and earnings beat expectations

Citi│ core operations were strengthened while developing AI agent

BofA Securities│ Advertising business was strong, while game business was in line with forecasts, with QoQ decline in capital expenditure

Goldman Sachs│All businesses were solid and beat projections

Nomura│ Online game business drove higher-than-expected revenue

Daiwa│ AI introduction fueled advertisement growth

BOCI│ Quarterly results beat expectations, with surprising overseas games, continuing executing solid AI strategy

CLSA│ Game and advertising persistently beat forecasts, while enhanced AI capabilities and ecosystem stickiness drove revenue growth

Morgan Stanley│ All segments demonstrated solid performance

CICC│ Game performance was strong, with ongoing AI deployment

JPMorgan│ Results were solid

Source: AAStocks Financial News

http://www.aastocks.com/en/stocks/news/ ... -news/AAFN

[winston]

not vested

4Q25 Results Preview:
Intact Online Games And Ad Empowered By Accelerating AI Applications

We expect Tencent’s revenue growth to remain solid at 13% yoy in 4Q25 despite macro headwinds and the ad-spend tax, continuing to benefit from inventory release and AI empowerment.

We opine that near to mid-term catalysts would include:
a) multiple flagship new game launches in 2026,
b) continued improvement in ad placement efficiency driven by AI, and
c) the launch of AI-powered Mini Program code development tools on WeChat.

Maintain BUY with an unchanged target price of HK$800.00.

Source: UOBKH

https://research.uobkayhian.com/content ... e=hs_email

[winston]

not vested

Rising AI investments in 2026F

We expect Tencent’s game revenue to grow by 15% yoy in 4Q25F, driven by strong revenue growth for Delta Force and other evergreen games.

We expect 4Q25F advertisement revenue to rise 21% yoy, mainly on AI technology improvement, which increased advertisement conversion effect and ECPM.

In 4Q25F, we estimate total revenue and adjusted net profit rose 14% and 15% yoy, respectively, supported by game and ad business growth, and GPM expansion.

Reiterate Add, with an unchanged DCF-based TP of HK$750.

Source: CGS

https://rfs.cgsi.com/api/download?file= ... 85D1E26B87

[winston]

vested

Broker│View

BNP Paribas│2026 marks the year of investment

Jefferies│Unlocking AI opportunities, and investing is nothing new to the market

Citi│Quarterly and earnings in line

UBS│Commitment to AI investment prompting valuation recalibration

Nomura│Obvious shift towards AI cloud investment

JPMorgan│Results announcement strengthened the long-term narrative rather than short-term earnings expectations

Daiwa│Solid quarterly results, with AI initiatives accelerating

BOCI│Quarterly results in line, and reinvestment sped up along with sustainable earnings growth in core businesses and expanded AI investment

Goldman Sachs│Entering the AI investment stage in the era of agentic AI

CICC│Strong fundamental resilience, alongside active AI investment

Morgan Stanley│AI investment accelerating

Source: AAStocks Financial News

http://www.aastocks.com/en/stocks/news/ ... -news/AAFN

[winston]

vested

<Research>BofAS Sees Clear Valuation Re-rating Pathway for TENCENT (00700.HK), Reiterates Buy Rating

BofA Securities issued a research report saying that TENCENT (00700.HK) 's 4Q25 results mitigated the risk for full-year earnings estimations, and seeing a clear path for valuation re-rating, including the launch of Hunyuan 3.0 and more large language model (LLM) upgrades within the next six months, accelerated capital expenditure and cloud revenue over the next 6-12 months, and the introduction of Weixin Agent in the next 9-18 months.

Considering the rise in TENCENT's AI investment, the broker lowered its 2026/ 2027 non-IFRS net profit forecasts by 4%/ 3%, and kept its target price at $780, with rating reiterated at Buy.

Source: AASTOCKS Financial News

http://www.aastocks.com/en/stocks/news/ ... -news/AAFN

[winston]

not vested

Tencent Q1 revenue miss heightens pressure for AI payoff

Revenue for the three months climbed 9 per cent to 196.5 billion yuan.

Net income rose to 58.1 billion yuan, higher than the 57.8 billion yuan projection.

Source: Bloomberg

https://www.businesstimes.com.sg/compan ... -ai-payoff

[winston]

vested

<Research>G Sachs, Encouraged by Progress of TENCENT's AI Strategy, Reiterates Buy

TENCENT (00700.HK) Chief Strategy Officer James Mitchell, participated in the Asia Communacopia+Technology conference hosted by Goldman Sachs, where the group's AI strategy was a key topic of discussion.

The broker highlighted that Tencent's Hunyuan 3.0 model, following a comprehensive overhaul of its foundational model strategy, has become one of the most competitive models in its category in China.

Tencent has rebuilt its LLM team, redesigned its pre-training and reinforcement learning stack, expanded and cleaned its datasets, and shifted evaluation metrics from public benchmarks to general intelligence.

Hy3 is regarded as one of the stronger models in its size class, laying the groundwork for launching larger and more advanced model iterations over the next 6-9 months.

Related News - Nomura: TENCENT (00700.HK) Solid Core Businesses Support AI Investment, Rating "Buy"

Tencent is accelerating AI investment while maintaining resilience in its core profitability.

Returns on AI investment are divided into short-cycle deployments, such as advertising technology and Tencent Cloud, which can deliver measurable near-term returns.

Long-cycle deployments, such as the Hunyuan model, are expected to create long-term value through differentiated datasets and the WeChat ecosystem.

The broker is encouraged by the progress of Tencent's AI strategy, including a YoY spike in AI capex commitments, token usage performance of the Hunyuan 3.0 preview version, and early productivity agent user retention metrics.

It believes the path to valuation multiple re-rating will depend on:-
1. The evolution of the AI narrative over the remainder of 2026
2. Transitioning from a late entrant in foundational models to the recent launch of a new Hunyuan model
3. Increased capex and the potential rollout of a WeChat AI agent while
4. Reaffirming Tencent Cloud's commitment as one of China's three major hyperscale service providers.

The broker maintained its Buy rating on TENCENT (00700.HK) with a 12-month target price of HKD700.

Source: AASTOCKS Financial News

http://www.aastocks.com/en/stocks/news/ ... -news/AAFN