Zhi Tong Cai Jing·2025-10-16 08:53Core Viewpoint - The report from China Merchants Securities maintains a "strong buy" rating for Tencent Holdings (00700), highlighting the company's robust main business and impressive performance in its core gaming sector, along with significant improvements in various business lines due to AI empowerment [1][2]. Group 1: Business Performance - Tencent's core gaming business shows strong performance, contributing positively to overall revenue [1]. - The advertising sector has seen significant benefits from AI applications, enhancing efficiency and effectiveness [1]. - The company's e-commerce ecosystem is gradually improving with the upgrade of WeChat Mini Stores [1]. Group 2: AI Investments - Tencent is increasing its investment in AI, which is yielding tangible benefits across various sectors, including advertising and gaming [2]. - AI functionalities in WeChat have been enriched, providing intelligent search capabilities and automated customer service for merchants [1][2]. - In gaming, AI is enhancing content creation and player engagement in popular games like "Honor of Kings" and "Peacekeeper Elite" [1]. Group 3: Financial Outlook - The rising proportion of high-margin businesses is expected to support the improvement of the company's profit margins [1]. - Despite potential short-term cost increases due to AI investments, the existing high-quality revenue is anticipated to help maintain financial stability [2]. - The acceleration of application scenarios is expected to create additional growth opportunities for the company's performance [2].