Ubs Securities·2026-03-03 09:40Investment Rating - The report maintains a "Buy" rating for Tencent Holdings with a target price of HKD 780 [1] Core Insights - Tencent's stock has declined approximately 13% year-to-date, underperforming the Hang Seng Tech Index and the Hang Seng Index, primarily due to investor concerns regarding potential industry disruption from AI and Tencent's competitive position in the AI space [1] - Despite the stock's decline, UBS believes that most downside risks are already reflected in the stock price and highlights positive developments in Tencent's AI and gaming businesses that investors may be overlooking [1] - The report emphasizes that success in the AI sector hinges on the ability to integrate high-quality models, a strong user base, and extensive data, noting that WeChat's 1.4 billion users and its diverse application scenarios provide Tencent with unique advantages that are difficult to replicate [1]