Zhi Tong Cai Jing·2025-11-14 07:28Core Viewpoint - Daiwa's report indicates that Tencent Holdings (00700) demonstrated robust performance in Q3, with revenue exceeding market expectations by 2% due to better-than-expected gaming and advertising revenues [1] Revenue Performance - Marketing services revenue grew by 21% year-on-year, driven by AI advertising targeting technology that enhanced eCPM and increased traffic [1] - Domestic gaming revenue increased by 15% year-on-year despite high base challenges from the previous year, while international gaming revenue surged by 43%, attributed to one-time income from the acquisition of Supercell and contributions from newly acquired studios [1] Earnings Forecast - Daiwa has adjusted its earnings per share forecast for 2026-27 down by 2% due to increased R&D costs, while maintaining a "Buy" rating with a target price of HKD 750 [1] Capital Expenditure Insights - Management indicated that due to chip supply constraints, the annual capital expenditure for AI infrastructure will be lower than previously guided, with the original guidance suggesting it would account for a low single-digit percentage of revenue [1] - The actual proportion is expected to reach 10% of the annual revenue forecast, although management believes GPU resources are sufficient for internal model training needs [1] Cloud Business Growth - Despite management's confidence in GPU resources, Daiwa believes that chip supply limitations are hindering faster growth in the cloud business [1]