Zhi Tong Cai Jing·2025-10-13 08:14Core Viewpoint - Goldman Sachs reports that Tencent Holdings (00700) is leveraging AI across all its business lines, benefiting from its unique WeChat ecosystem and global gaming assets. The firm maintains a "Buy" rating on Tencent, raising the base case target price from HKD 701 to HKD 770, with a bull case target of HKD 846 and a bear case target of HKD 541 [1]. Group 1 - Tencent's stock has risen 56% year-to-date, outperforming the Hang Seng Tech Index, which increased by 44%. Despite concerns over U.S. tariffs and geopolitical risks, Goldman Sachs remains positive on Tencent [1]. - The stock has been revalued to a 2026 expected non-IFRS price-to-earnings ratio of 19 times, yet it still trades at a discount compared to global peers. Tencent possesses relatively low liquidity assets and multiple AI-driven monetization levers, along with a stable shareholder return policy [1]. Group 2 - The market is expected to focus on AI applications and capital expenditure outlook, as well as upgrades in foundational and multimodal AI model capabilities in Tencent's Q3 earnings report [1]. - Goldman Sachs forecasts a 13% year-on-year increase in Tencent's Q3 revenue and an 18% increase in earnings per share, driven by high-margin revenue sources and operational leverage [1]. - The firm has raised its capital expenditure forecast for Tencent from 2023 to 2027 to RMB 350 billion and has also increased its cloud revenue growth projections [1].