智通财经网·2025-08-21 12:13Core Viewpoint - Bank of America maintains a "Buy" rating for Tencent with a target price of HKD 690, indicating significant upside potential from the current price of HKD 593 [1] AI Potential - Tencent is heavily investing in upgrading its mixed Yuan model to create a comprehensive AI ecosystem, which is crucial for its growth [2] - The recent push to direct traffic to the Yuan model has successfully increased user numbers, with expectations for further growth through cross-promotion activities [2] - The unique advantage of AgenticAI within WeChat allows for seamless integration of services, enhancing user engagement and potential revenue streams [2] Financial Technology and Enterprise Services - The payment business is showing signs of recovery, with commercial payments turning positive year-on-year in Q2 2024, supported by stable price levels [3] - Favorable conditions for credit business development include low interest rates and improved macroeconomic stability, with AI being deployed for credit scoring [3] - The cloud business continues to grow at double-digit rates, capitalizing on increasing demand for real-time communication solutions [3] Advertising Business - AI is becoming a core driver for advertising revenue, with improvements in click-through rates (CTR) and increased display frequency contributing to growth [4] - The majority of advertising growth in Q2 2025 is expected to come from higher cost-per-thousand impressions, driven by enhanced data utilization and algorithm upgrades [4] Gaming Business - AI is enhancing content production efficiency in gaming, while advanced game engines are improving visual quality, leading to better game performance and extended lifecycles [5] - Tencent remains optimistic about opportunities in the international gaming market, leveraging its expertise in technology and game-as-a-service (GaaS) [5] Profit Margins - Tencent's gross margins are expected to continue expanding, driven by a shift towards higher-margin self-developed games and increased contributions from financial technology and advertising [6] Mini Program Store - The gross merchandise volume (GMV) of WeChat's mini program store is growing rapidly, with a focus on enhancing service capabilities rather than competing in the food delivery space [7] Target Price Basis - The target price of HKD 690 is based on discounted cash flow (DCF) analysis and the value of equity investments, with a weighted average cost of capital (WACC) of 8.6% and a projected compound annual growth rate (CAGR) of 9% from 2021 to 2028 [8]