Investment Rating - The report indicates a positive outlook for the company, highlighting a significant revenue and profit growth driven by the "AI + overseas expansion" strategy [4][12]. Core Insights - The company achieved a total revenue of 1.713 billion RMB in the first half of 2025, representing a year-on-year growth of 39.0%, significantly accelerating from 17.7% in the same period last year [2][7]. - The overseas revenue growth reached an impressive 439%, marking it as the core engine driving the company's overall performance [2][9]. - The company aims for revenue targets of over 4 billion RMB in 2025, over 6 billion in 2026, and over 10 billion by 2028, with a current dynamic P/E ratio of approximately 23 times and a PS ratio of about 0.4 times [4][12]. Financial Performance Summary - Sales revenue for FY2023 was 2,098.2 million RMB, with a year-on-year decline of 8.8%, but projected to rebound to 2,627.3 million RMB in FY2024, reflecting a growth of 25.2% [1]. - The adjusted net profit for the first half of 2025 was approximately 51.8 million RMB, showing a year-on-year increase of 10.3% [2][7]. - The gross profit margin for the first half of 2025 was 10.32%, with a gross profit of 177 million RMB, up 29.2% year-on-year [2][7]. Strategic Initiatives - The "AI + overseas expansion" dual-driven strategy has shown significant effectiveness, with 60% of the funds raised from the new share placement allocated for developing AI applications in overseas markets [3][8]. - The company is integrating AI technology into its core products, enhancing advertising precision and efficiency, and establishing a competitive edge in the market [3][10]. - The collaboration with major smartphone manufacturers has created a robust ecosystem, covering over 90% of smartphone users, which supports the company's strategic initiatives [10][11].

Core Viewpoint - Citigroup's research report indicates that Tencent's revenue growth accelerated to 15% year-on-year in Q2, reflecting significant results from its AI investments in marketing services, gaming, and enterprise services [1] Revenue and Profit Growth - Tencent benefited from the growth of high-margin businesses such as domestic gaming, video accounts, and WeChat search, leading to a gross profit increase of 22% [1] - Operating profit and net profit growth rates reached 18% and 20%, respectively [1] AI Technology Application - The company has successfully applied AI technology in various aspects of gaming, including game production, gameplay design, promotion, and advertising recommendations, enhancing its competitive edge in the ecosystem [1] Future Outlook - Looking ahead, Tencent is expected to see steady revenue growth from its evergreen games, the launch of the mobile game "Valorant," increased contributions from "Delta Force," upgrades to its advertising platform, and rising enterprise GPU demand [1] - Citigroup believes that the growth paths for Tencent's various businesses will become clearer, reaffirming a "buy" rating and industry preference, while raising the target price to HKD 735 [1]