Zhi Tong Cai Jing·2025-08-14 08:05Core Viewpoint - Morgan Stanley expects Tencent Holdings (00700) to continue experiencing robust revenue growth due to the successful deployment of artificial intelligence across all its business lines, leading to an 8% increase in target price from HKD 650 to HKD 700 while maintaining an "Overweight" rating [1] Group 1: Financial Performance - Tencent's Q2 performance significantly exceeded expectations, reflecting the successful implementation of AI across its business lines [1] - The company is projected to have a full-year capital expenditure of RMB 97 billion, with RMB 47 billion already spent this year [1] - For Q3, Morgan Stanley anticipates revenue and adjusted operating profit growth of 12% and 14% respectively, with gaming revenue expected to grow by 16% year-on-year [1] Group 2: Market Outlook - The overall progress of capital expenditure is in line with expectations, despite supply chain constraints in Q2, with an acceleration expected in the second half of the year as H20 chips resume sales in China [1] - There is confidence that advertising revenue will achieve a sustainable growth rate of 20% in Q3 [1]