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<Research>G Sachs: TENCENT 3Q Results Beat; AI Drives Growth Across Biz Lines
Recommend 5 Positive 6 Negative 2 |
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Goldman Sachs released a report on TENCENT (00700.HK), which delivered solid 3Q results, with revenue achieving the fastest growth in four years and adjusted operating profit steadily ascending. This reinforced the broker’s positive view of the company, given its unique WeChat ecosystem and global gaming assets, which provided diversified monetization leverage, helping the company achieve compounding of earnings through macro cycles. The broker continued to believe that Tencent is one of the best-positioned companies in China's internet sector to benefit from the ongoing application of AI. Its two major revenue sources, gaming and marketing services, have maintained over 20% YoY growth for three consecutive quarters. The broker raised its revenue forecasts for 2025-27 by 0-1% to reflect the sustained improvement in growth driven by the continued application of AI in gaming, marketing services, and financial/corporate services. The broker also slightly adjusted its net profit forecasts for 2025-27 by -1 to 0%, as strong revenue growth was partially offset by increasing expenses from rental of AI-related computing power, S&M on AI native app and R&D on AI initiative. The target price remained at HKD770. AASTOCKS Financial News Website: www.aastocks.com |
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