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<Research>Citi Expects TENCENT (00700.HK) Core Biz to Be Resilient, Lifts TP to $787, Maintains Top Pick Status
Recommend 23 Positive 32 Negative 23 |
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Citi Research issued a research report reiterating rating at Buy on TENCENT (00700.HK), lifting its target price from $783 to $787, and maintaining its status as its top pick. While TENCENT may not be a frontrunner in the AI race, its track record shows that the Company often emerges as a leader after entering markets later than existing players, as demonstrated in game, social networking, payment and other areas, the broker added. Although Citi Research expected the Group's investment in new AI products this year to surge by over 1x from last year, potentially leading to slower profit growth than revenue growth, the broker predicted this to be a short-term situation, and believed that over time, the resilient core business' profit growth will be sufficient to cover AI expenses, allowing TENCENT to achieve faster profit growth than revenue growth again. The Group is forecasted to record revenue/ gross profit/ adjusted operating profit growth of 8.6%/ 9.3%/ 4.3% YoY in 2026, respectively. The broker also believed that the upcoming release of the Hunyuan 3.0 model and new agentic AI within WeChat will enable the Group to seize the "OpenClaw" moment's opportunities, consolidating its market position. AASTOCKS Financial News Website: www.aastocks.com |
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