2025 Fourth Quarter and Annual Results Presentation March 18, 2026 Cautionary Note This presentation may contain forward-looking statements relating to the forecasts, targets, outlook, estimates of financial performance, opportunities, challenges, business developments, business plans and growth strategies of Tencent Holdings Limited (the "Company" or "Tencent") and its group companies. These forward-looking statements are based on information currently available to Tencent and are stated here on the basis ...

Core Viewpoint - Tencent Holdings reported a strong financial performance for Q4 2025, with revenue and net profit exceeding expectations, indicating robust growth in various business segments [1][2]. Financial Performance - Q4 2025 revenue reached RMB 194.37 billion, a 13% year-on-year increase, slightly above the forecast of RMB 194.07 billion [1][2]. - Net profit for Q4 was RMB 58.26 billion, surpassing the expected RMB 55.05 billion, with an adjusted net profit of RMB 64.69 billion, reflecting a 17% year-on-year growth [1][2]. - The total revenue for the year 2025 was RMB 751.8 billion, with a projected increase to RMB 834.2 billion in 2026 [6]. Business Segment Performance - Domestic gaming revenue for 2025 was RMB 164.2 billion, up 18% year-on-year, while international gaming revenue grew by 33% to RMB 77.4 billion [3]. - Social network revenue increased by 5% to RMB 127.7 billion, and marketing services revenue rose by 19% to RMB 145 billion, driven by higher ad prices and exposure [3]. - Financial technology and enterprise services revenue grew by 8% to RMB 229.4 billion [3]. Cash Flow and Share Buyback - As of December 31, 2025, Tencent's net cash was RMB 107.1 billion, up from RMB 102.4 billion on September 30, 2025, primarily due to free cash flow generation [3]. - The company repurchased approximately 153.4 million shares for a total cost of around HKD 80 billion, which were subsequently canceled [3]. Dividend Announcement - The board of Tencent Holdings proposed a final dividend of HKD 5.30 per share for the fiscal year 2025, an increase from the previous HKD 4.50 [4]. Market Performance - Tencent's stock closed at HKD 550.5, reflecting a slight increase of 0.09%, with a market capitalization of HKD 501.3 billion [5].

EF001 第 2 頁 共 2 頁 v 1.1.1 免責聲明 | EF001 | | --- | | 發行人所發行上市權證/可轉換債券的相關信息 | | --- | | 發行人所發行上市權證/可轉換債券 不適用 | | 其他信息 | | 其他信息 不適用 | | 發行人董事 | | 於本公告刊發日期，騰訊控股有限公司之董事為： | | 執行董事： | | 馬化騰； | | 非執行董事： | | Jacobus Petrus (Koos) Bekker 和 Charles St Leger Searle；及 | | 獨立非執行董事： | | 李東生、Ian Charles Stone、楊紹信、柯楊和張秀蘭。 | | 香港交易及結算所有限公司及香港聯合交易所有限公司對本公告的內容概不負責，對其準確性或完整性亦不發表任何聲明，並明確表示，概不對因 公告全部或任何部份內容而產生或因倚賴該等內容而引致的任何損失承擔任何責任。 | | | --- | --- | | 股票發行人現金股息公告 | | | 發行人名稱 | 騰訊控股有限公司 | | 股份代號 | 00700 | | 多櫃檯股份代號及貨幣 | 80700 RMB ...

Financial Performance - Total revenue for the year ended December 31, 2025, reached RMB 751,766 million, a 14% increase from RMB 660,257 million in 2024[5] - Gross profit for the same period was RMB 422,593 million, reflecting a 21% year-over-year growth from RMB 349,246 million[5] - Operating profit increased by 16% to RMB 241,562 million compared to RMB 208,099 million in the previous year[5] - Net profit attributable to equity holders increased by 16% to RMB 224.842 billion, with non-IFRS net profit rising by 17% to RMB 259.626 billion[17] - Annual profit increased to RMB 229,801 million from RMB 196,467 million, representing a growth of approximately 16.9%[50] - Total comprehensive income for the year decreased to RMB 275,351 million from RMB 284,342 million, a decline of about 3.5%[50] - The company reported a total comprehensive income of RMB 284,342 million for the year, up from RMB 196,467 million in the previous year, indicating robust financial performance[55] Revenue Segments - The value-added services segment saw a revenue increase of 16% to RMB 369.281 billion, driven by strong game performance in both domestic and international markets[12] - Marketing services revenue grew by 19% to RMB 144.973 billion, attributed to increased ad pricing and exposure[12] - Financial technology and enterprise services revenue rose by 8% to RMB 229.435 billion, supported by demand for cloud services and improved cost efficiency[13] - The company achieved over RMB 40 billion in annual revenue from evergreen games, benefiting from the success of "Delta Action" and the expansion of existing titles[8] Expenses and Investments - Selling and marketing expenses increased by 15% to RMB 41.727 billion, reflecting enhanced promotional efforts for AI-driven applications and games[16] - General and administrative expenses grew by 21% to RMB 136.127 billion, primarily due to increased R&D spending related to AI investments[16] - Research and development expenses for the year ending December 31, 2025, were RMB 85,747 million, an increase from RMB 70,686 million in 2024[66] - The company incurred a total tax expense of RMB 47,448 million in 2025, compared to RMB 45,018 million in 2024[77] Cash Flow and Liquidity - Net cash flow from operating activities for the year ended December 31, 2025, was RMB 303,052 million, an increase from RMB 258,521 million in 2024, representing a growth of approximately 17.2%[56] - The cash and cash equivalents at the end of 2025 increased to RMB 141,041 million from RMB 132,519 million at the end of 2024, marking a recovery in liquidity[56] - Free cash flow for Q4 2025 was RMB 34,000 million, supported by net cash generated from operating activities of RMB 66,500 million[45] Shareholder Returns - The company proposed a final dividend of HKD 5.30 per share for the year ended December 31, 2025, up from HKD 4.50 per share in 2024, pending shareholder approval[6] - The company recognized a total of RMB 37,665 million in cash dividends during the year[54] - The company repurchased a total of 153,415,000 shares at a total cost of approximately HKD 80 billion during the year, with shares subsequently canceled to enhance shareholder value[102] User Engagement - The number of WeChat and WeChat combined monthly active accounts reached 1,418 million, a 2% increase year-over-year[7] - The number of QQ mobile terminal monthly active accounts decreased by 3% to 508 million compared to 524 million in 2024[7] - The company reported a significant increase in daily active accounts, reflecting a growing user base and engagement[115] Strategic Initiatives - The company plans to continue investing in new technologies and market expansion strategies to drive future growth[66] - Future outlook includes strategic initiatives to expand market presence and enhance product offerings, with a focus on innovation and technology development[115] - The company is actively pursuing mergers and acquisitions to strengthen its market position and diversify its portfolio[115] ESG and Governance - Tencent's ESG rating improved from BBB to A, reflecting recognition of its sustainable development efforts[9] - The company emphasizes the importance of environmental, social, and governance (ESG) factors in its strategic planning[115] - The company has adhered to the corporate governance code, with ongoing reviews of its existing structure to ensure compliance[109] Technology and Innovation - Tencent Cloud achieved scalable profitability, driven by rising enterprise AI demand and growth from leading PaaS and SaaS products[8] - The company’s AI investments have led to improved advertising targeting capabilities and enhanced user interaction in gaming[7] - The integration of artificial intelligence (AI) technologies is a key focus area for enhancing operational efficiency and customer experience[114] - The company plans to continue leveraging AI-driven innovation to create long-term value and achieve a more sustainable future[111]

Company Overview - Proactive is a financial news publisher that provides fast, accessible, informative, and actionable business and finance news content to a global investment audience [2] - The company has a team of experienced and qualified news journalists who produce independent content [2] Market Focus - Proactive specializes in medium and small-cap markets while also covering blue-chip companies, commodities, and broader investment stories [3] - The content delivered includes insights across various sectors such as biotech and pharma, mining and natural resources, battery metals, oil and gas, crypto, and emerging digital and EV technologies [3] Technology Adoption - Proactive is recognized for being a forward-looking technology adopter, utilizing decades of expertise and experience among its content creators [4] - The company employs automation and software tools, including generative AI, while ensuring that all published content is edited and authored by humans [5]

Market Updates - JD Health (06618) rose over 4.5% following a strategic partnership announcement with leading medical device brand Yuyue Medical [1] - Kangfang Biopharma (09926) increased by over 5.7% after receiving NMPA clinical trial approval for its novel tri-specific antibody drug AK150 for treating advanced malignant solid tumors [1] - Yunfeng Financial (00376) saw a significant rise of 14.18%, with a previous day increase of over 10%, amid a temporary suspension announcement related to a major stock price surge [1] - Steel stocks collectively declined, with Asia Pacific Resources (01104) down 7.59% and Maanshan Iron & Steel (00323) down 7.28% [1] Earnings Warnings and Gains - Jiuyuan Group (00827) fell over 20% after issuing a profit warning, projecting a net loss of approximately RMB 709 million for the year ending December 31, 2025, an increase from a loss of RMB 505 million in 2024 [2] - Changfeng Pharmaceutical (02652) surged nearly 43% after announcing that its inhalation powder ICF001 for treating pulmonary arterial hypertension has received NMPA acceptance for clinical trial application [2] - Yicheng Industrial (01596) rose over 76% after announcing a projected net profit of approximately RMB 334 million for the year ending December 31, 2025, compared to a net loss of RMB 57.7 million in 2024 [3] - Akeso Biopharma (09939) increased by over 10.7% following a strategic cooperation agreement with Funo Pharmaceuticals to develop a new cosmetic product [3] Other Notable Movements - Soundon Technology (02495) rose over 5% after projecting a net profit of no less than RMB 120 million for the year ending December 31, 2025, compared to a net loss of RMB 481 million in 2024 [4] - Starry Chain Group (00399) saw an increase of 18.52% after announcing a memorandum of understanding with Newbridge Acquisition Limited for potential acquisition opportunities [4] US Market Highlights - Tencent Holdings (ADR) (TCEHY.US) rose 1.11% as it welcomed Apple's adjustment of App Store commission policies in China [5] - Meta (META.US) fell 3.83%, marking its largest intraday drop since March 6, due to delays in the release of its new AI model [5] - Ulta Beauty (ULTA.US) dropped 14.24% despite strong same-store sales growth, as fourth-quarter profits fell short of expectations [5] - Bitcoin rose over 5% to $73,764, while Ethereum increased over 6.5% to $2,201.41, reflecting a positive trend in the cryptocurrency sector [6]

Summary of Tencent Holdings Conference Call Company Overview - **Company**: Tencent Holdings (0700.HK) - **Current Stock Price**: HKD 552.00 - **Target Price**: HKD 750.00 by December 31, 2026 - **Analysts**: Multiple analysts from J.P. Morgan, including Alex Yao, Daniel Chen, Nancy Liu, and Olivia Xu Key Industry Insights - **AI Development Concerns**: The market's concern regarding Tencent's lag in AI development compared to peers is considered overstated. Tencent is viewed as the most fundamentally sound internet company in China, with potential to derive tangible value from AI despite not leading in standalone chatbot competition [1][6][14]. - **Embedded AI Strategy**: The dominant form of AI in China is expected to be embedded functionalities within existing high-frequency workflows rather than standalone assistants. Tencent's WeChat plays a crucial role in communication, discovery, payment, and fulfillment, creating friction for independent AI applications [2][15]. - **QClaw's Strategic Importance**: QClaw extends WeChat's functionality from a communication interface to a task orchestration interface, allowing users to initiate real tasks through chat. This is seen as a significant step in enhancing ecosystem stickiness and monetization options [2][7][21]. Core Arguments and Evidence - **Market Mispricing**: The market is perceived to be pricing Tencent based on a binary view of either leading in independent models or losing its AI relevance. This perspective is deemed incomplete, as Tencent can capture AI value through a moderate embedding approach [14][15]. - **Financial Resilience**: Tencent's existing profit pools and robust super app ecosystem provide a resilient financial foundation, insulating short-term performance from perceived shortcomings in AI competition [6][12]. - **Operational Efficiency Gains**: The direct financial upside from AI is expected to manifest through enhanced efficiency and pricing power in Tencent's high-margin mature businesses, rather than through unproven subscription models of independent applications [12][30]. Risks and Challenges - **Independent AI Development**: The primary risk is the rapid development of independent assistants or operating system-level AI that could undermine WeChat's role as the default intent entry point. Other risks include user habit formation influenced by long-term subsidies outside Tencent's ecosystem and execution failures due to integration delays or reliability issues [3][36]. - **Market Competition**: If competitors successfully embed independent assistants at the operating system level, the friction advantages of existing super apps may diminish. Additionally, aggressive funding for independent assistants could reshape user habits away from WeChat [36]. Additional Important Insights - **QClaw's Functionality**: QClaw is designed to operate as a local AI assistant that can execute tasks on a user's computer, emphasizing ease of deployment and integration with WeChat. It is not intended to replace the native WeChat assistant but rather to enhance its capabilities [21][33]. - **Economic Viability**: Tencent's multi-path execution strategy allows it to provide competitive AI experiences without the need for owning the best foundational models. This pragmatic approach focuses on user experience, flexibility, and deployment speed [23][24]. - **Valuation Framework**: Investors are encouraged to anchor valuation frameworks on downstream profit pools rather than early product appearances. The expected growth potential from AI is seen as more reliable in established high-margin areas rather than in direct consumer subscription models [30][32]. Conclusion - **Investment Outlook**: Tencent's core engines, including its WeChat ecosystem, advertising, and gaming, are expected to remain resilient. The AI narrative is anticipated to have a more significant impact on stock direction than immediate earnings adjustments. The stock is viewed as undervalued concerning its AI potential, with a target price set at HKD 750.00, reflecting a robust operational outlook and expected benefits from generative AI developments [38][39].

Summary of Tencent Holdings Conference Call Company Overview - **Company**: Tencent Holdings - **Industry**: Technology and Entertainment Key Points Valuation and Financial Performance - Tencent's valuation is near historical lows, with a projected PE ratio of approximately 14.5 times for 2026, only 13% away from its historical minimum of 12 times [1][2] - Expected revenue CAGR over the next three years is 9%, while profit CAGR is projected at 11%, supported by over 100 billion RMB in annual buybacks and dividends, leading to a total return rate of about 15% [1][2] Business Segments - **Gaming**: Anticipated growth of 14% in 2026, driven by major titles such as "Delta Action" and the highly anticipated "Honor of Kings World," expected to generate over 10 billion RMB annually [1][5] - **Advertising**: Projected to maintain a growth rate of 20%, with contributions from the video account and AI algorithm optimizations, each accounting for about half of the growth [1][5][6] - **Financial Technology**: Growth is accelerating with offline payments contributing 80% of profits; AI investments are controlled and have minimal depreciation pressure [1][7] AI Strategy - Market concerns regarding AI have somewhat suppressed Tencent's valuation, but AI has not been assigned a positive valuation premium in its valuation framework [3] - Tencent's AI strategy is characterized as "latecomer," focusing on enhancing existing business operations rather than speculative narratives [3][7] Upcoming Catalysts - The upcoming earnings report on March 18 is expected to provide positive catalysts, including potential guidance on capital expenditures, the resumption of buybacks, and deeper discussions on the AI strategy [4][6] Market Context - Despite a 23% decline in the Hang Seng Tech Index since October, Tencent's strong fundamentals provide a solid support for its stock price, contrasting with companies lacking performance backing [2] Investment Outlook - Tencent is viewed as a high-quality core asset with a stable development outlook over the next three years, with a target price based on a 20 times PE ratio, indicating at least a 40% upside potential from current levels [7][8] AI Applications Comparison - Tencent's AI applications, such as QClaw and Workbody, are designed for ease of use and integration within Tencent's ecosystem, offering advantages in flexibility and security compared to competitors like OpenClaw [8][9] Additional Insights - The gaming business's growth is significantly influenced by the low base effect from 2025, ensuring high certainty in reported growth for 2026 [5] - The advertising business is expected to outperform market expectations, with potential for exceeding the anticipated growth rates due to AI-driven efficiencies [6]

Investment Rating - The report maintains a "Buy" rating for Tencent Holdings [1][10] Core Insights - Tencent is positioned as a core beneficiary in the AI era, leveraging its super entrance and ecological barriers for further evolution [7] - The company has a solid financial foundation and core scenarios that support its AI strategy, indicating strong potential for latecomers [9][12] - Tencent's AI capabilities are being enhanced through organizational restructuring and the recruitment of top talent, improving the efficiency of AI research and commercialization [9][40] - The company has established a leading position in 3D and image generation capabilities within the industry [9][40] - The ecological value of Tencent's AI will be amplified in the Agent era, with significant impacts on existing business lines such as advertising and gaming [9][12] Financial Data and Profit Forecast - Revenue projections for Tencent are as follows: - 2023: 609 billion - 2024: 660 billion - 2025E: 755.6 billion - 2026E: 848.8 billion - 2027E: 929.9 billion - Year-on-year growth rates are projected at 9.8% for 2023, 8.4% for 2024, 14.4% for 2025, 12.3% for 2026, and 9.6% for 2027 [8] - Adjusted net profit forecasts are: - 2023: 157.7 billion - 2024: 222.7 billion - 2025: 260.2 billion - 2026: 296.9 billion - 2027: 337.1 billion - Year-on-year growth rates for adjusted net profit are 36.4% for 2023, 41.2% for 2024, 16.9% for 2025, 14.1% for 2026, and 13.5% for 2027 [8] Valuation and Target Price - The overall target valuation for Tencent is set at 61,412 billion RMB, corresponding to a target price of 765 HKD per share, indicating a potential upside of 40% from the closing price on March 12, 2026 [10][12]

Core Viewpoint - WeRide has expanded its strategic partnership with Tencent Cloud to enhance the integration of its autonomous driving technology with Tencent's mobility services, aiming to provide safer and more reliable driverless transportation to a broader user base [1][7]. Group 1: Partnership and Integration - WeRide's Robotaxis are now integrated into the Tencent Mobility Service mini program on WeChat, allowing users to book and pay for rides directly through the app [2]. - This collaboration strengthens the connection between WeRide's autonomous driving technology and Tencent's mobility service ecosystem, facilitating easier access to driverless transportation [2][4]. - The partnership is a continuation of their previous agreements, which focused on promoting large-scale commercial operations of Level 4 Robotaxi services [7]. Group 2: Service Expansion and User Experience - The Robotaxi service will soon be available on Tencent Maps, further broadening the options for autonomous ride-hailing [5]. - Currently, the service is being launched in Guangzhou, with plans for gradual expansion to other cities [6]. - Users can easily book rides through WeChat by selecting the "Autonomous Driving – WeRide" option when a nearby Robotaxi stop is available [6]. Group 3: Operational Growth and Future Goals - WeRide's global Robotaxi fleet exceeded 1,023 vehicles as of January 2026, with a target of over 2,600 vehicles by the end of 2026 and tens of thousands by 2030 [11]. - The company aims to deepen cooperation with partners like Tencent Cloud to accelerate the global commercialization of autonomous driving [11]. - WeRide has launched fully driverless commercial operations in multiple cities, including Guangzhou and Beijing, and is expanding its services internationally [8][10].