Investment Rating - The report maintains a "Buy" rating for Tencent with a target price of 792 HKD [6][5][28] Core Insights - Tencent's revenue for Q4 2025 is expected to grow by 13% year-on-year, with adjusted net profit projected to increase by 16% to 643 billion RMB [1] - Key growth drivers include the launch of multiple new games, improved advertising efficiency through AI, and enhanced support for AI mini-programs on WeChat [1][3][4] - The gaming segment is anticipated to see a 16% increase in revenue, while advertising revenue is expected to rise by 20% [2][4] Summary by Relevant Sections Gaming Business - Tencent's gaming revenue for Q4 is projected to grow by 16%, with the new game "Counter-Strike: Future" expected to generate 35-70 billion RMB in its first year [2][12] - The game fills a gap in Tencent's PVE shooting game offerings and has already achieved over 10 million players shortly after launch [2][12][16] Financial Technology - Financial technology revenue is expected to grow by 9%, driven by a slowdown in social retail growth [3] - AI mini-programs are anticipated to enhance e-commerce and local services, with significant growth expected in 2026 [3][19] Advertising Revenue - Advertising revenue is projected to increase by 20%, driven by budget increases from long-tail advertisers and efficiency improvements from AI [4] - WeChat's advertising capabilities are evolving, with new features aimed at enhancing social commerce [4][19] Profit Forecast and Valuation - Revenue forecasts for Tencent have been slightly adjusted downwards for 2025-2027, with adjusted net profit estimates also revised [5][24] - The target price of 792 HKD corresponds to a PE ratio of 21.6 for 2026, reflecting a slight decrease from previous estimates [5][28][30]

Core Insights - Goldman Sachs reports that the Chinese gaming and entertainment sector experienced significant stock price increases in 2025, with large and mid-cap stocks rising by 50% to 80% compared to the Hang Seng China Enterprises Index's 26% [1] - The report indicates that the strong performance is driven equally by valuation expansion and earnings per share growth [1] - Looking ahead to 2026, the firm believes the risk-reward profile remains attractive, with a focus on "alpha" driven opportunities [1] Group 1: Market Trends - Chinese gaming publishers and content platforms, represented by Tencent Holdings and NetEase, are accelerating their overseas expansion, leveraging capital, talent, and technological capabilities [2] - The global market share of Chinese game manufacturers is expected to increase from the current level of approximately 15% [2] Group 2: AI Impact - AI is seen as a transformative force, reducing production and labor costs while enhancing efficiency and revenue potential, particularly in gaming and advertising sectors [2] - The total addressable market (TAM) for AI-generated film tools is projected to expand tenfold by 2028 [2] Group 3: Investment Recommendations - Goldman Sachs identifies key buy stocks including Tencent, NetEase, Kuaishou, Bilibili, and Tencent Music, with Tencent's core business expected to maintain low to mid-double-digit growth annually [2] - The firm maintains a "buy" rating on Tencent, lowering the target price from HKD 770 to HKD 752 [2]

智通财经APP获悉，高盛发布研报称，中国游戏与娱乐板块在2025年股价经历了广泛上涨，大中型股涨 幅达50至80%(相较恒生中国企业指数的26%)，并在2026年初延续强劲表现，部分股票涨幅高达30%(相 较相关指数约3-5%)。该行认为此次上涨一半由估值扩张、一半由每股盈利增长所驱动。 高盛选出的核心买入股份，包括腾讯、网易、快手-W(01024)、哔哩哔哩(BILI.US)、腾讯音乐。该行认 为腾讯的核心业务(游戏+广告)将继续保持每年低至中十位数的增长，主要受惠于常青游戏的持续力、 关键产品管线，以及广告生态系统在变现与人工智能上的助力。该行继续认为，腾讯是人工智能应用的 重要代理，也是投资者的核心持股。该行维持腾讯"买入"评级，下调目标价由770港元降至752港元。 (2)海外市场扩张加速：中国游戏发行商及内容平台(以腾讯控股(00700)、网易-S(09999)为代表)正在加 快出海步伐。中国游戏厂商的优势在于资本与人才密集、技术能力突出以及高效的持续内容升级，这些 因素正推动其全球市场份额从当前约15%水平进一步提升。 (3)人工智能应用的赋能与颠覆方面，高盛指AI不仅开始降低生产与人力成本，提高 ...

该行认为，全栈能力是Agent时代能否脱颖而出的关键变量 举例对比：(1)谷歌1月11日宣布Gemini将赋能沃尔玛超市，升级沃尔玛用户购物体验，本质是通过UCP 协议连接外部零售商的"开放联盟"模式;(2)豆包此前发布的AI手机则遇到了支付API难题，在后续更新中 限制了支付宝等金融类应用的使用，该行认为是生态不完善导致AI能力无法充分发挥;(3)阿里本身就拥 有完善的线上&线下购物生态，结合Qwen大模型，上层直接打通淘宝商品库、支付宝支付体系及本地 生活服务体系。这种深度整合有望解决AIAgent落地中最棘手的"决策信任"与"支付断点"难题。此外， 全栈优势有望带来广阔Agent发挥空间。千问"任务助理"功能在App和Web端开始定向邀测，该功能具备 类人化的多步骤规划能力，覆盖应用开发、Office办公、咨询调研及生活办事等核心场景，支持一键处 理报表整理、研报撰写及小工具生成等复杂任务，商业化变现路径渐显清晰。 智通财经APP获悉，广发证券发布研报称，深度整合有望解决AIAgent落地中最棘手的"决策信任"与"支 付断点"难题。此外，全栈优势有望带来广阔Agent发挥空间。该行重视国内算力产业链建设 ...

Core Insights - The article highlights the rapid growth of WeChat mini-games, which have served over 1 billion users in the past year, with a monthly active user (MAU) count exceeding 500 million and a daily active user (DAU) increase of 10% year-on-year, alongside a 27% improvement in user retention [5][6]. Group 1: Market Dynamics - Mini-games are outpacing traditional app-based mobile games, with a user overlap of only 10% between the two, indicating that mini-games are attracting a new audience rather than cannibalizing existing app users [6][7]. - By mid-2024, the active user base of mini-games is expected to surpass that of app-based mobile games for the first time, with mini-games becoming a significant force in the gaming market [7]. - The advertising spending on mini-games has recently surpassed that of app-based mobile games, with daily ad spending reaching approximately 94 million yuan for mini-games compared to 90 million yuan for app games [7][8]. Group 2: WeChat's Competitive Advantage - WeChat's social attributes are deeply integrated into the mini-game ecosystem, facilitating viral growth through social connections, with social channels contributing 30%-50% of users for social mini-games [10]. - The revenue generated from social users in some IAA mini-games exceeds 80%, showcasing the high commercial value of social engagement [10]. - In 2025, the number of mini-games with over 1 million DAU is projected to increase from 60 to 70, and the number of games generating over 10 million yuan in quarterly revenue is expected to rise from 190 to 300 [10]. Group 3: User Demographics and Trends - The user base of WeChat mini-games is predominantly from first and second-tier cities, with 45% of users aged between 24 and 40 years [12]. - The gender distribution is 55% male and 45% female, with female-oriented games starting to gain traction, indicating a shift in market dynamics [12][14]. - Female players are showing a growth rate in spending that is double that of male players, suggesting a significant opportunity for female-targeted game development [14]. Group 4: Developer Support and Monetization - WeChat has implemented favorable revenue-sharing policies for developers, including aligning iOS platform fees with Android, allowing developers to retain 70% of revenue, plus an additional 15% incentive [16][29]. - The platform is simplifying commercialization policies for IAA mini-games, offering up to 90% revenue share for short-term incentives and 85% for long-term incentives [16]. - Developers are encouraged to leverage AI tools for innovation, with the potential for AI-generated content to enhance game development and user engagement [26][30]. Group 5: Future Directions - The focus for the mini-game industry is on uncovering genuine user needs behind social interactions, emphasizing the importance of creating shareable content that stimulates social behavior [25]. - WeChat aims to balance monetization with user experience by exploring non-intrusive advertising formats and ensuring that the game's value to users is prioritized over revenue generation [28]. - The platform is also looking to enhance interactive advertising and content marketing strategies to improve user engagement and retention [35][36].

Financial Forecast - The company is expected to achieve revenue of 195.4 billion yuan in Q4 2025, representing a year-over-year growth of 13% [1] - Value-added services are projected to generate 90.9 billion yuan, with a year-over-year increase of 15% [1] - Within value-added services, the gaming sector is anticipated to reach 59.3 billion yuan, growing by 21% year-over-year, while social networking is expected to generate 31.6 billion yuan, up by 6% [1] - Online advertising revenue is forecasted at 40.5 billion yuan, reflecting a 16% year-over-year growth [1] - Financial technology and enterprise services are expected to generate 61.9 billion yuan, with a year-over-year growth of 10% [1] - The gross margin is projected to be 20%, an increase of 3.0 percentage points year-over-year, resulting in a gross profit of 108.7 billion yuan, up by 20% [1] - Non-IFRS operating profit is expected to be 70 billion yuan, an 18% increase year-over-year, with a non-IFRS net profit of 65.1 billion yuan, also up by 18% [1] Gaming Sector - Revenue from gaming is expected to grow by 21% year-over-year in Q4 2025, with domestic and overseas markets growing by 17% and 28% respectively [1] - Domestic evergreen games are performing steadily, with shooting games showing strong performance, particularly titles like "Delta Force" and "Valorant Mobile" contributing to revenue growth [1] - Several key new games are set to launch in Q1 2026, indicating strong future growth potential in the gaming sector [1] - Overseas, Supercell's "Clash Royale" continues to generate high revenue, and the AAA game "Dying Light: The Beast" is performing strongly, supporting sustained high growth in overseas gaming [1] Marketing Services - Revenue from marketing services is projected to grow by 16% year-over-year in Q4 2025, with the WeChat ecosystem advertising being the main growth driver [2] - The performance of video accounts and search ads remains strong, benefiting from enhanced advertising efficiency and conversion rates due to the synergy of content ecology and AI capabilities [2] Financial Technology and Enterprise Services - Revenue from financial technology and enterprise services is expected to grow by 10% year-over-year in Q4 2025, with stable payment business and double-digit growth in wealth management and micro-loan services [2] - Cloud business is anticipated to exceed 20% year-over-year growth, with WeChat's small store e-commerce technology service fees continuing to contribute to revenue [2] - Recent organizational adjustments in AI business aim to enhance the efficiency of large model development, with WeChat officially launching an AI mini-program developer growth plan [2] Profit Forecast and Investment Rating - The company is adjusting its profit expectations, forecasting revenues of 752.8 billion yuan, 847.5 billion yuan, and 931.5 billion yuan for 2025-2027 [2] - Non-IFRS net profit is projected to be 260 billion yuan, 299.2 billion yuan, and 338.4 billion yuan for the same period, with corresponding Non-IFRS EPS of 29, 33, and 37 yuan [2] - Based on the SOTP valuation method, the target market value for Tencent Holdings' various businesses in 2026 is set at 6.5 trillion yuan, corresponding to a target price of 791 HKD, maintaining a "buy" rating [2]

Investment Rating - The investment rating for Tencent Holdings is "Outperform the Market" (maintained) [2][8][23] Core Views - Tencent is expected to achieve revenue of CNY 194.6 billion in Q4 2025, representing a year-on-year growth of 13%. The network advertising sector is anticipated to perform steadily, benefiting from the release of advertising inventory and AI integration. The gaming business is expected to show strong performance, particularly with the game "Delta Operation" [4][9] - The company is increasing its investment in AI, which is expected to offset some operational leverage release. The AI investment will primarily manifest in R&D expenses, projected to grow by 28% in Q4 2025 [4][10] - The gaming segment is projected to generate revenue of CNY 58 billion in Q4 2025, with a year-on-year growth of 18%. Domestic game revenue is expected to grow by 16%, supported by established titles like "Honor of Kings" and "Peacekeeper Elite" [5][15][21] - Marketing services revenue is expected to reach CNY 41.3 billion in Q4 2025, reflecting an 18% year-on-year increase, driven by AI enhancements in advertising efficiency [6][19] - Financial technology and enterprise services are projected to grow by 9% year-on-year, with revenue expected to reach CNY 61.2 billion in Q4 2025, primarily driven by payment services [20] Summary by Relevant Sections Financial Performance - Q4 2025 revenue is expected to be CNY 194.6 billion, with a 13% year-on-year increase. Non-IFRS operating profit is projected at CNY 68.1 billion, up 15% year-on-year, and net profit is expected to be CNY 65.2 billion, reflecting an 18% increase [4][10][11] - The expected Non-IFRS net profit margin is 34% for Q4 2025 [10] Gaming Business - The gaming revenue forecast for Q4 2025 is CNY 58 billion, with an 18% year-on-year growth. Domestic game revenue is expected to grow by 16%, while overseas game revenue is projected to increase by 22% [5][21] Marketing Services - Marketing services revenue is anticipated to be CNY 41.3 billion in Q4 2025, marking an 18% year-on-year growth. AI-driven enhancements are expected to improve advertising efficiency significantly [6][19] Financial Technology and Enterprise Services - Revenue from financial technology and enterprise services is expected to reach CNY 61.2 billion in Q4 2025, with a 9% year-on-year growth, primarily driven by payment services [20]

Core Viewpoint - The article posits that ByteDance's Zhang Yiming is likely to become the richest person in China over the next decade due to his strong motivation, learning ability, execution power, and the resources of ByteDance, which are expected to drive significant growth in various sectors, including mobile, automotive, and space computing [4][5]. Industry Insights - In the mobile internet era, there were 10 apps in China with over 500 million MAU, but in the AI era, it is anticipated that only 3-4 Super Apps will achieve this milestone [4][5]. - The DAU/MAU ratio is expected to increase, with 500 million MAU likely corresponding to approximately 350 million DAU, enhancing the value of Super Apps compared to the mobile internet era [5]. - The article emphasizes that the value of Super Apps is greater than that of leading robotics companies, as Super Apps control entry points and can generate excess commercial returns [6]. Competitive Landscape - The competition for AI Native Super Apps is intensifying, with Alibaba's Qwen and ByteDance's Doubao positioned as key players. The article highlights the strategic moves of Alibaba to prevent Meituan from launching a competing Super App [8][9]. - Other companies like Tencent, Meituan, Pinduoduo, JD, and Baidu are also seen as potential contenders in the Super App battle, while smaller players may struggle to compete [9][10]. - The article suggests that Meituan's exit from community group buying is part of a broader AI strategy to position itself for the Super App market [10][11]. Future Projections - The article predicts that the AI Native Super App market could reach a revenue potential of 1 trillion RMB, urging companies to act quickly to launch their AI applications [11]. - Huawei is positioned to dominate the automotive sector but is unlikely to enter the Super App market due to its strategic focus on other areas [12]. - Tencent is recognized for its stability and product matrix, with the potential to maintain a significant role in the AI Native Super App landscape, although ByteDance's Doubao is gaining influence among younger users [12].

Core Insights - The application of AI in the gaming industry is rapidly evolving, with independent developers leveraging AI tools to bring their ideas to life, indicating a shift in how games are developed and created [1][3] - The current AI wave is seen as a transformative opportunity, moving from a phase of hype to one of practical application and commercialization [3][4] Industry Trends - The AI industry in China is experiencing significant activity, with companies like Zhiyu and MiniMax successfully listing in Hong Kong, outperforming market expectations [3] - The AGI-Next conference highlighted the advancements in AI, with discussions indicating that China's AI capabilities in commercial applications and engineering design may surpass those of the U.S. [3][4] AI Applications in Gaming - The integration of AI in gaming can be categorized into two types: AI for Game, which enhances the workflow of game development teams, and AI in Game, which directly influences gameplay [4][5] - Tencent's VISVISE, an AI-driven 3D character animation pipeline, exemplifies the efficiency gains possible with AI, reducing the time for skinning from 1-3.5 days to under 5 minutes [4][5] Developer Insights - Many game developers are moving beyond using AI as a mere asset generation tool, instead allowing it to influence game design and development processes [6][7] - A report indicates that 86.36% of game companies in China are utilizing AI in their development processes, showcasing widespread adoption [7] Competitive Landscape - Chinese game developers are reportedly advancing faster in AI applications compared to their Western counterparts, who are often more cautious due to concerns about originality and the impact of AI on creativity [16][18] - The preference for rapid iteration and long-term operational models in China allows for more agile integration of AI technologies into games [18][20] Future Directions - AI NPCs are emerging as a key area of focus, with potential to enhance player experiences by making NPC interactions more dynamic and engaging [21][24] - The development of AI NPCs can address common player complaints about static and repetitive NPC behaviors, thereby improving overall gameplay [24][25] Conclusion - The gaming industry is positioned as a critical testing ground for AI technologies, with the potential for significant advancements in both game development and player experience [42][44] - As AI continues to evolve, its integration into gaming is expected to drive innovation and create new gameplay experiences, making it a competitive frontier for companies [41][44]

Summary of Key Points from the Conference Call Industry Overview - The report focuses on the structural changes in the global AI industry as of early 2026, particularly highlighting the divergence in AI application markets between China and the United States [1][1]. Macro Trends and Market Divergence - The AI application market in China and the U.S. is experiencing a stark contrast, described as "ice and fire" [1][1]. - U.S. software stocks have significantly declined since January 2026, primarily due to concerns raised by Anthropic's release of an Agent product capable of fully automated workflows, which has disrupted market perceptions of software development costs and value [1][1]. AI Application Ecosystem - The Chinese AI application ecosystem is more inclined towards "closed-loop integration," with leading companies leveraging their own traffic and ecosystems to rapidly implement Agent functionalities [2][2]. - Since August 2025, upstream computing power (chips, devices, storage) has shown strong performance, while downstream application sectors (internet, software companies) have exhibited weakness [2][2]. Technology Evolution and Model Landscape - Basic models are entering a linear growth phase, with the first tier consisting of Anthropic, OpenAI, and Gemini, while the second tier includes Grok, Zhiyu, and Kimi [3][3]. - Domestic models like Tongyi Qianwen are lagging, while Deepseek V4 is expected to challenge the first tier [3][3]. - There has been no breakthrough leap in capabilities, but overall abilities are steadily improving [4][4]. - Multimodal capabilities are becoming critical, with models like Google’s NanoBanana enhancing Agent performance in various applications [4][4]. - Vertical models are shifting towards a "post-training + reinforcement learning" approach, internalizing expert reasoning rather than relying on external retrieval systems [4][4]. Comparison of Domestic and International AI Applications - In China, companies like ByteDance, Tencent, and Alibaba are integrating AI into their ecosystems effectively, with Alibaba's Tongyi Qianwen being recognized as the first true consumer-facing Agent [5][5]. - In contrast, international players like Anthropic focus on programming workflows, while OpenAI and Google are still primarily chatbot-oriented, lacking in task planning capabilities [5][5]. Investment Logic and Recommendations - Upstream sectors such as storage (DRAM/HBM/SSD), semiconductor equipment, and power equipment are expected to benefit from the shift in AI inference demand and TSMC's planned capital expenditure increase of 30%-40% in 2026 [6][6]. - Platform companies that integrate ecosystems, models, and traffic are highlighted, with Alibaba and Tencent being key players in China [6][6]. - Recommendations for terminal scene companies include Meitu, Roblox, and Reddit, while ToB tool companies like Adobe and Figma are noted for their collaborations with large model companies [7][7]. Core Judgments and Outlook - The year 2026 is termed the "third year of the Agent," with high market premiums but uncertain outcomes [7][7]. - The core competitiveness of Agents is shifting from "general dialogue" to "automated workflow execution," particularly in vertical fields like programming and healthcare [7][7]. - Domestic AI applications are advancing rapidly in consumer markets due to closed ecosystems, while international markets are more disruptive in B2B workflow automation [7][7]. - Storage demand is transitioning from training to inference, with SSDs expected to become the foundational infrastructure for the next generation of Agents [7][7]. - The document emphasizes a critical turning point in the AI industry from "model competition" to "application implementation," with clear divergence in paths between China and the U.S. [7][7].