Analyst Gary Yu from Morgan Stanley maintained a Buy rating on Tencent Holdings and keeping the price target at HK$700.00.
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Gary Yu has given his Buy rating due to a combination of factors that highlight Tencent Holdings’ strong financial performance and strategic initiatives. The company’s revenue increased by 15%, exceeding expectations by 2%, with a notable 23% growth in the gaming sector, particularly from international markets. This robust revenue growth underscores Tencent’s ability to capitalize on its diverse portfolio and expand its global presence.
Additionally, Tencent’s non-IFRS operating profit rose by 18%, slightly surpassing market estimates by 1%, despite higher selling, marketing, and general administrative expenses. The company’s strategic share buybacks and disciplined capital expenditure, which decreased from the previous quarter, further demonstrate its commitment to enhancing shareholder value and maintaining financial discipline. These factors collectively contribute to Gary Yu’s positive outlook on Tencent Holdings, justifying the Buy rating.
In another report released on November 5, CLSA also maintained a Buy rating on the stock with a HK$740.00 price target.