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<Research>G Sachs: TENCENT Valuation Has Bottomed; Buy Rating Kept with TP HKD700
Recommend 31 Positive 50 Negative 22 |
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TENCENT (00700.HK) share price has plummeted cumulatively by 27% YTD, in light of market concerns over the progress of its AI development and limited visibility on returns from consumer-side AI agent investments, leading to valuation compression. Based on the current price, the stock is trading at about 12x 2026E PE. The broker believed TENCENT’s valuation multiple has bottomed out and may provide support to the share price. It maintained a Buy rating on TENCENT with a target price of HKD700. The broker noted that TENCENT has recently made initial progress in its AI strategy, including a remarkable YoY increase in AI capex, leading Token usage ranking of its Hunyuan Hy3 model on third-party API channels, and solid development of enterprise AI businesses such as the intelligent agent Workbuddy. Goldman Sachs expected TENCENT Cloud’s growth to accelerate, advertising revenue to maintain high teens to 20% growth, and WeChat AI agents to potentially launch pilot programs in 2H26. Auto-translated by AI This article was automatically translated by AI, the original language version should be considered the authoritative version. AASTOCKS.com Limited does not guarantee its accuracy or completeness and accepts no liability for any damages or losses arising from the use of this translation. More Details
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