Saiyi He, an analyst from CMB International Securities, maintained the Buy rating on Tencent Holdings Limited (TCTZF – Research Report). The associated price target was raised to HK$625.00.
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Saiyi He has given his Buy rating due to a combination of factors including Tencent’s robust financial performance and strategic investments in AI. The company reported a significant increase in total revenue and net income, surpassing expectations, primarily driven by strong growth in its gaming and marketing sectors. Despite a slight dip in net margin due to increased R&D expenses, Tencent’s commitment to AI investment is seen as a catalyst for long-term growth in its cloud, marketing, and gaming businesses.
Moreover, Tencent’s gaming and marketing segments have outperformed expectations, with notable contributions from both domestic and international markets. The company’s strategic focus on AI is expected to enhance user engagement and drive further revenue growth. Additionally, Tencent’s increased capital expenditure is aimed at unlocking new growth opportunities, particularly in its cloud services, which aligns with its multi-model AI strategy to enhance consumer and enterprise experiences. These factors collectively support the Buy rating, reflecting confidence in Tencent’s future growth prospects.
In another report released today, DBS also maintained a Buy rating on the stock with a HK$669.00 price target.