Tencent Holdings Research Summary Company Overview - **Company**: Tencent Holdings - **Sector**: Internet/e-Commerce - **Description**: Tencent is a leading provider of messaging services, value-added services, online games, advertising, and e-commerce in China. The social app Weixin has over 1 billion domestic accounts, and Tencent also offers enterprise services like Cloud and IT solutions [11][12]. Key Financial Metrics - **3Q25 Net Income**: Adjusted net income was RMB 70.6 billion, up 18% YoY, exceeding consensus by 7% [16]. - **Revenue**: 3Q25 revenue reached RMB 192.9 billion, a 15% YoY increase [16]. - **Capex**: 3Q25 capital expenditure was RMB 13 billion, below consensus due to chip availability issues [1]. - **2025E Revenue**: Expected to be RMB 750 billion, with a gross profit of RMB 423 billion [15]. Investment Rating and Price Objective - **Rating**: BUY - **Price Objective**: HKD 780, based on a sum-of-the-parts (SOTP) valuation [3][17]. Growth Drivers - **AI Strategy**: Tencent is focusing on AI applications, integrating AI-supported use cases into Weixin. The company is expected to prioritize internal chip use over external sales due to supply constraints [1]. - **Gaming Segment**: Anticipated growth from titles like Delta Force, Valorant Mobile, and Honor of Kings (HoK) [2]. - **Advertising Revenue**: Growth expected from Video Account and Weixin search ads, which have higher gross margins [2]. Financial Projections - **2025E Non-IFRS Diluted EPS**: Expected to be RMB 28.13, reflecting a 18.8% YoY increase [4][15]. - **2026E Revenue**: Projected to reach RMB 821 billion, with a gross profit margin of 57% [15]. - **Free Cash Flow**: Expected to be RMB 145.9 billion in 2025 [9]. Risks and Challenges - **Competition**: Intensifying competition in the gaming and advertising sectors [3]. - **Regulatory Uncertainty**: Potential regulatory challenges in fintech and gaming [18]. - **Macroeconomic Factors**: A weaker macro environment could impact advertising and fintech revenues [18]. Additional Insights - **Market Position**: Tencent maintains a strong market leadership position across various segments, with significant growth potential in monetization through Weixin [12]. - **AI and E-commerce Potential**: The company has substantial upside potential from AI applications and e-commerce growth [12]. - **Debt Management**: Net debt is projected to decrease significantly by 2027, indicating improved financial health [9]. Conclusion Tencent Holdings is positioned for continued growth driven by its strong market presence, innovative AI strategies, and robust gaming and advertising segments. However, investors should remain cautious of competitive pressures and regulatory risks that could impact future performance.

Core Insights - Tencent's total revenue for 3Q25 increased by 15% YoY to RMB192.9 billion, surpassing Bloomberg consensus and internal estimates, driven primarily by a 23% YoY growth in games revenue [1] - Non-IFRS operating income rose by 18% YoY to RMB72.6 billion, aligning with expectations despite higher-than-anticipated operating expenses [1] - The company has reduced its FY25 capex guidance due to supply chain constraints but remains focused on accelerating AI applications across various sectors [1] Group 1: Gaming Revenue - Games revenue grew by 23% YoY to RMB63.6 billion in 3Q25, supported by strong international business performance [1] - Domestic games revenue increased by 15% YoY to RMB42.8 billion, driven by evergreen titles and contributions from Delta Force [1] - International games revenue surged by 43% YoY to RMB20.8 billion, mainly due to Supercell's games and newly acquired studios [1] Group 2: Marketing Services - Marketing services revenue rose by 21% YoY to RMB36.2 billion in 3Q25, fueled by higher ad impressions and effective eCPMs [2] - Increased user engagement and ad load across Video Accounts and Mini Programs contributed to solid growth in ad impressions [2] - The launch of AIM+, an automated ad campaign solution, enhanced ads ROI through improved targeting [2] Group 3: Fintech and Business Services - Fintech and Business Services (FBS) revenue increased by 10% YoY to RMB58.2 billion in 3Q25, with fintech revenue showing high-single-digit growth [3] - Growth in commercial payment volume and consumer loan services supported fintech revenue [3] - Business services revenue grew in the teens percentage YoY, driven by AI cloud and e-commerce services [3] Group 4: Capital Expenditure and Operating Metrics - Non-IFRS operating profit margin (OPM) improved by 1 percentage point YoY to 37.6% in 3Q25 due to operating leverage [3] - Sales and marketing (S&M) and R&D expenses increased by 22% and 28% YoY, respectively, reflecting heightened promotional and R&D efforts for AI initiatives [3] - Total capex decreased by 24% YoY to RMB13.0 billion, with FY25 capex expected to be lower than previous guidance but higher than FY24 levels [3]

Summary of Tencent Holdings (0700.HK) 3Q25 Earnings Call Company Overview - **Company**: Tencent Holdings - **Ticker**: 0700.HK - **Quarter**: 3Q25 Key Highlights 1. **Revenue Growth**: Tencent reported a revenue increase of 15% year-over-year (yoy) to Rmb192.869 billion, exceeding expectations by 2% [15][24] 2. **Gaming Performance**: Online games revenue grew by 23% yoy to Rmb63.6 billion, driven by strong domestic and international game performance [15][21] 3. **Advertising Revenue**: Advertising revenue increased by 21% yoy to Rmb36.242 billion, supported by AI-driven marketing services [15][16] 4. **FinTech and Business Services**: Revenue from FinTech and Business Services grew by 10% yoy to Rmb58.174 billion, with healthy growth in consumer loan services and commercial payment activities [19][21] 5. **Operating Profit**: Adjusted operating profit rose by 18% yoy to Rmb72.570 billion, with a gross margin of 56.4%, reflecting a 3.3 percentage point increase yoy [15][19] 6. **Earnings Per Share (EPS)**: Non-IFRS EPS was Rmb7.58, up 19% yoy, surpassing consensus estimates by 6% [15][19] AI and Cloud Initiatives 1. **AI-Driven Growth**: AI initiatives are driving revenue growth, particularly in marketing services, which saw a 21% increase [2][10] 2. **Capex Outlook**: Capital expenditure decreased to Rmb13 billion in 3Q25 from Rmb19 billion in 2Q25, primarily due to foreign chip supply constraints [2][19] 3. **AI Model Development**: Tencent's AI Lab introduced a new Continuous Autoregressive Language Model (CALM), which reduces training and inference compute requirements [10][11] Strategic Focus Areas 1. **Gaming Strategy**: Continued focus on domestic and international gaming strategies, with upcoming launches expected to sustain revenue growth [13][14] 2. **Advertising Technology**: Progress in AI-driven ad tech upgrades and the performance of the new AIM+ automated ad campaign solution [12][14] 3. **Talent Retention**: Emphasis on retaining top talent in AI development to enhance competitive positioning [10][11] Financial Metrics 1. **Deferred Revenue**: Deferred revenue growth slowed to 11% yoy, down from 12% in the previous quarter [2][19] 2. **Free Cash Flow**: Free cash flow increased to Rmb58.5 billion in 3Q25, compared to Rmb43.0 billion in 2Q25 [21] 3. **Net Cash Position**: Net cash reached Rmb102.4 billion by the end of 3Q25, up from Rmb74.6 billion in 2Q25 [21] Risks and Challenges 1. **Industry Competition**: Increased competition in performance-based advertising could impact revenue growth [14][23] 2. **Game Launch Delays**: Potential delays in game launches and regulatory approvals may affect future performance [14][23] 3. **Reinvestment Risks**: Risks associated with reinvestment in AI and cloud initiatives could impact profitability [14][23] Conclusion - Tencent's strong performance in 3Q25, driven by AI and gaming, positions the company favorably for future growth. However, challenges such as competition and regulatory hurdles remain critical considerations for investors [14][23]. The company maintains a Buy rating with a 12-month target price of HK$770, reflecting a potential upside of 17.2% from the current price of HK$657 [24][23].

Financial Data and Key Metrics Changes - Total revenue for Q3 2025 was CNY 193 billion, up 15% year-on-year [4] - Gross profit increased to CNY 109 billion, reflecting a 22% year-on-year growth [4] - Non-IFRS operating profit rose to CNY 73 billion, an 18% increase year-on-year [4] - Non-IFRS net profit attributable to equity holders was CNY 71 billion, also up 18% year-on-year [5] - Overall gross margin improved to 56%, up 3 percentage points year-on-year [18] Business Line Data and Key Metrics Changes - Value-added services (VAS) revenue was CNY 96 billion, up 16% year-on-year, contributing 50% of total revenue [6] - Social networks revenue increased by 5% year-on-year to CNY 32 billion, driven by video accounts and music subscriptions [7] - Domestic games revenue grew by 15% year-on-year, primarily due to titles like Delta Force and Honor of Kings [7] - International games revenue surged by 43% year-on-year, attributed to upfront revenue recognition from new titles [8] - Marketing services revenue increased by 21% year-on-year to CNY 36 billion, supported by ad spend growth [12] Market Data and Key Metrics Changes - Combined monthly active users (MAU) of Weixin and WeChat reached 1.4 billion, showing growth both year-on-year and quarter-on-quarter [5] - Music subscription revenue increased by 17% year-on-year, with subscribers growing to 126 million [7] - The mobile launch of Valorant resulted in a doubling of combined monthly active users to over 50 million in October [10] Company Strategy and Development Direction - The company is focusing on strategic investments in AI, enhancing capabilities in ad targeting and game engagement [4] - The Hunyuan foundation model is being upgraded, with improvements in imagery and 3D generation models [4] - The company aims to grow Yuanbao adoption and develop agentic AI capabilities within Weixin [4][9] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the growth of the international gaming business, although a deceleration in growth rates is expected [23] - The macroeconomic environment is gradually improving, which could positively impact consumer spending and payment volumes [66] - Management highlighted that AI capabilities are expected to drive future growth in advertising revenue [49] Other Important Information - The company reported a net cash position of CNY 102.4 billion, up 37% quarter-on-quarter [20] - Operating expenses increased, with R&D expenses rising by 28% year-on-year due to AI investments [18] Q&A Session Summary Question: What has driven the growth in international gaming? - The growth was supported by the consolidation of newly acquired studios and upfront revenue recognition from Dying Light: The Beast [23] Question: Can you elaborate on the Hunyuan team upgrades? - The company is hiring top talent and improving the Hunyuan architecture to enhance AI capabilities [30] Question: How does the AI Marketing Plus solution benefit advertisers? - The solution allows advertisers to automate targeting and bidding, leading to superior returns [33] Question: What is the outlook for advertising revenue growth? - The growth is expected to continue, driven by AI capabilities and improving consumer spending [49] Question: How does the company view its relationship with Apple? - The company has a constructive relationship with Apple and is working to enhance the mini game ecosystem [48] Question: What are the trends in consumer loans and cloud revenue? - Consumer loans are stable, and cloud revenue is expected to grow, although AI chip availability may constrain growth [68]

Summary of Key Points from the Conference Call Industry and Companies Involved - **Industry**: Internet & New Media - **Key Companies**: Alibaba (BABA), Tencent (700 HK), Baidu (BIDU), Pinduoduo (PDD), JD (JD US), Trip.com (TCOM), JD Health (JDH), Tencent Music (TME), J&T (1519 HK) Core Insights and Arguments Alibaba (BABA) - **Investor Sentiment**: Dominated discussions, with US investors generally underweight on BABA while Chinese mutual funds are bullish [1][2] - **Ecommerce Concerns**: US investors express caution regarding BABA's ecommerce business, citing that customer management revenue (CMR) growth of ~10% year-on-year is driven by increased take-rate rather than improved gross merchandise volume (GMV) [2] - **Quick Commerce (QC) Potential**: The outlook for BABA's ecommerce is improving due to QC, which is expected to enhance cross-selling opportunities and increase transactions in offline retail [3] - **Market Penetration Forecast**: Retail quick commerce penetration is projected to rise to 14% from ~10%, potentially reaching nearly CNY2 trillion by 2028, representing about 25% of BABA's ecommerce scale [4] - **Losses and Recovery**: Estimated losses for the September quarter are CNY36 billion, up from CNY11 billion in the previous quarter, but expected to narrow to CNY21 billion in the December quarter due to improved operational efficiency [5] - **Cloud Business Recognition**: BABA's cloud business is viewed as a long-term growth driver, with significant interest in its AI capabilities, particularly its self-designed chips and Qwen LLM [6] Tencent (700 HK) - **Investor Confidence**: Generally favored by investors, with expectations of higher-than-expected earnings growth of +12% year-on-year for 3Q25F [8] - **Business Momentum**: Strong performance in online gaming and advertising, particularly through its short video service, Video Account [8] - **Target Price**: Maintained target price of HKD757, implying a 20% upside [8] Baidu (BIDU) - **Hedge Fund Interest**: Hedge funds are becoming more positive on Baidu due to its Robotaxi and chip-design businesses, with recent chip orders worth over CNY1 billion from China Mobile [9] - **Execution Concerns**: Despite positive sentiment, there are significant concerns regarding Baidu's execution and the weak state of its advertising business, which is crucial for cash flow [10][11] Pinduoduo (PDD) and JD (JD US) - **PDD Favorability**: PDD is gaining favor among investors, with expectations of improving profitability from 3Q25 onwards [12] - **JD's Investment Strategy**: JD's significant investment in quick commerce is viewed skeptically by some investors, although there are signs of narrowing losses [14] - **Outlook for JD Retail**: Concerns about JD Retail's outlook due to tough comparisons starting from 4Q onwards [14] Trip.com (TCOM) - **Investor Loyalty Amid Concerns**: Long-only investors remain loyal to TCOM despite growing unease about macroeconomic headwinds and competition risks [16] - **Competition Risks**: Increased competition from brands like Agoda may require TCOM to invest more in overseas markets, potentially capping margin expansion [17] - **Revenue Forecast**: Below-Street forecast for TCOM's non-GAAP operating margin and revenue growth due to soft travel demand in China [18] Vertical Leaders - **Valuation Concerns**: JD Health, Tencent Music, and J&T are viewed positively for their growth potential, but their valuations are a concern as they trade above 20x FY26F P/E [19] Other Important Insights - **Market Dynamics**: The discussions reflect a divergence in sentiment between US and Chinese investors, particularly regarding Alibaba and Baidu, highlighting the impact of geopolitical tensions and market conditions on investment decisions [6][10]

Summary of Key Points from the Conference Call Industry Overview - The conference call primarily discusses the **China online entertainment industry**, focusing on mobile gaming, online video, and online music sectors. Mobile Gaming Insights - **Overall Market Performance**: Q3 2025 saw a **4% YoY decline** in mobile game grossing due to a high base in 2024, but a **2% QoQ increase**. This is softer than typical Q3 vs Q2 seasonality, attributed to fewer new launches in summer compared to previous years [2][10]. - **Key Players**: - **Tencent**: Achieved a **9% QoQ growth** in grossing, driven by strong performance from **Delta Force** (estimated **Rmb1.5 billion** in September). Other stable titles include **Honor of Kings**, **Peacekeeper Elite**, and **DNF Mobile** [2][9]. - **NetEase**: Reported a **5% QoQ growth** in mobile grossing, with notable contributions from **Eggy Party** and **Where Winds Meet**, although this was partially offset by declines in **Sword of Justice** and **Identity V**. It is noted that only about **40%** of NetEase's reported mobile revenue is tracked, indicating potential revenue from non-app store channels [2][6]. - **Bilibili**: Launched **Escape From Duckrov**, achieving a peak of **222,000 concurrent players**, ranking it as the **5 most played game globally on Steam** [2][6]. Online Video Sector - **Kuaishou** launched **Kling 2.5 Turbo**, which is now the **1** in text-to-video and image-to-video generation, maintaining a cost advantage over competitors like Google's Veo 3 [3][4]. - **iQiyi**: Experienced a **10% MoM/YoY decline** in MAUs but is expected to see low-single-digit QoQ growth in membership revenue for Q3, aided by summer traffic improvements [3][4]. - **Tencent Video** and **Youku** have seen some recent successes with new content releases, while **Mango TV** maintained flat MAUs YoY [3][4]. Online Music Trends - The online music industry saw a **2% YoY increase** in MAUs, but time spent remained stable. **TME** (Tencent Music Entertainment) reported a **7% decline** in combined MAUs, with QQ Music and Kugou Music showing significant drops [6][7]. - **NetEase Cloud Music** showed a slight recovery with a **2% YoY increase** in MAUs, while **Soda Music** outperformed with a **91% YoY increase** in MAUs, likely benefiting from ByteDance's traffic [6][7]. Future Content Pipeline - Upcoming major content releases include titles from **Tencent Video**, **iQiyi**, **Youku**, and **Mango TV**, with several anticipated to launch in late October and throughout November and December [7][8]. Investment Outlook - The report remains positive on the online entertainment sector, citing: 1. Healthy consumer spending on leisure activities. 2. Supply-side improvements due to a more favorable regulatory environment and innovations in business models [4][5]. Additional Insights - The report emphasizes the importance of AI in content production and the potential for new business models to drive growth in the online entertainment sector [4][5]. This summary encapsulates the key insights and data points from the conference call, providing a comprehensive overview of the current state and future outlook of the online entertainment industry in China.

Summary of Key Points from the Conference Call Industry Overview - The conference call focuses on the **China Internet Equities** sector, particularly the performance and outlook of major companies within this industry, including **Tencent**, **Alibaba**, **NetEase**, and **Kuaishou** [1][2]. Core Insights and Arguments 1. **Valuation Trends**: - The China internet sector has seen a **38% increase year-to-date (YTD)**, with the one-year forward PE multiple expanding from **14x to 21x**. However, large-cap China internet stocks are trading at **16x**, which is below the **10-year average of 20x**, indicating that valuations are not yet demanding [2][21]. 2. **Growth Areas**: - **AI and Gaming** are highlighted as key growth areas. The demand for AI, particularly in robust inferencing and post-training, is expected to sustain growth. Companies like Tencent and NetEase are well-positioned to benefit from this trend, with Tencent's gaming titles expected to drive growth in 4Q25 and 2026 [3][4]. 3. **Stock Picking Framework**: - The analysis suggests that **Tencent** and **Alibaba** are best positioned to benefit from AI-related growth. Both companies are expected to see earnings upside from a recovery in their associates and joint ventures. The top picks in gaming are **Tencent** and **NetEase**, with potential margin surprises from legacy games [4][19]. 4. **Risks Identified**: - **Geopolitical uncertainty**: Potential chip export restrictions from the US could impact supply chains. - **Competition**: The ongoing price war in quick commerce may lead to deeper losses, with new entrants like PDD and Douyin intensifying competition. - **Market Corrections**: The sector's forward PE of **21x** may make it vulnerable to corrections during risk-off events [5][19]. Additional Important Insights 1. **AI as a Growth Driver**: - AI is expected to be a significant driver for further re-rating in the sector. Companies like **Alibaba** and **Baidu** are leveraging advancements in self-developed chips and cloud revenue acceleration to capture AI demand [23][31]. 2. **Cloud Market Dynamics**: - **AliCloud** is positioned to gain market share, with plans for global expansion and a strong focus on AI capabilities. Tencent's international cloud revenue has also seen high double-digit growth year-over-year [25][31]. 3. **Valuation and Earnings Estimates**: - The report provides a detailed valuation snapshot, indicating that companies like **NetEase** and **Tencent** have favorable PEG ratios, trading at or below **1x PEG**. The analysis suggests that **Pinduoduo** (PDD) has emerged as a value opportunity trading at **10x 2026 PE** [4][11]. 4. **Sum-of-the-Parts Valuation**: - The sum-of-the-parts analysis for **Alibaba** and **Tencent** indicates potential upside of **20%** and **21%**, respectively, based on their core business valuations and strategic investments [36][37]. 5. **Market Sentiment**: - The sentiment in the market remains cautiously optimistic, with large caps like **Tencent**, **Alibaba**, **NetEase**, and **Kuaishou** rated as "Buy" due to their strong fundamentals and growth prospects [9][10]. This summary encapsulates the key points discussed in the conference call, providing insights into the current state and future outlook of the China internet sector.

Tencent Holdings Ltd. 3Q25 Earnings Call Summary Company Overview - **Company**: Tencent Holdings Ltd. - **Industry**: China Internet and Other Services - **Market Cap**: Approximately US$749.87 billion - **Stock Rating**: Overweight - **Price Target**: HK$700.00 Key Financial Metrics - **Revenue Growth**: Forecasted to grow by 13% YoY - **Non-IFRS Operating Profit Growth**: Expected to increase by 18% YoY - **Capital Expenditure (Capex)**: Estimated at Rmb320 billion for 2025-27 Revenue Breakdown - **Value-Added Services (VAS)**: Revenue increased by 13% YoY, with online games growing by 18% - Domestic games: +13% - International games: +30% - **Marketing Services**: Revenue growth of 20% YoY, driven by AI ad-tech upgrades - **FinTech and Business Services (FBS)**: Revenue growth of 10%, with FinTech growing by 6% and Business Services by 22% [2][3][4][9] Core Insights - **Gaming Performance**: Strong performance from evergreen games and new launches, with Delta Force achieving record grossing during its anniversary event [2] - **AI Adoption**: Early AI adoption in marketing services is yielding high ROI, with improved click-through rates and user engagement [3] - **Cloud Services**: Despite prioritizing internal AI applications, demand for cloud services is expected to drive revenue growth, albeit at a slower pace compared to competitors [4] Financial Projections - **2025-27 Non-IFRS Operating Profit**: Increased by 1-2% due to higher revenues from games and marketing [5][9] - **Earnings Per Share (EPS)**: Projected to rise from Rmb20.63 in 2024 to Rmb30.70 by 2027 [7][19] Valuation and Investment Thesis - **Valuation Methodology**: Price target based on a sum-of-the-parts approach, with a DCF value of HK$612/share for core businesses and HK$88/share for associate investments [16][20] - **Investment Drivers**: Globalization of gaming, higher social ad monetization, and strategic upgrades in consumer and industrial Internet [27] - **Risks**: Competition in social networks and gaming, regulatory challenges, and potential impacts from US-China tensions [36] Additional Insights - **Market Position**: Tencent is positioned as a leader in China's online consumer market, with most services ranking in the top three by user base [27] - **Share Buybacks**: Recent buybacks are expected to support share price stability [28] - **Long-term Growth Potential**: Continued expansion in the Industrial Internet and AI applications is anticipated to drive future growth [35] Conclusion Tencent Holdings Ltd. is expected to maintain solid growth across all business segments, driven by strong performance in gaming, marketing, and cloud services. The company's strategic focus on AI and capital management positions it well for future opportunities, despite facing competitive and regulatory challenges. The current price target reflects a favorable outlook for investors.

Summary of Tencent Holdings (0700.HK) 3Q25E Preview Company Overview - **Company**: Tencent Holdings (0700.HK) - **Reporting Date**: 3Q25 results to be reported on November 13, 2025 Key Industry Insights - **Gaming Sector**: - Anticipated strong performance driven by titles such as Delta Force and Peacekeeper Elite - Delta Force's daily active users (DAU) surpassed 30 million in September 2025, supported by promotional activities [3][12] - Tencent maintained a dominant position in mobile gaming, capturing 8 out of the top 10 grossing mobile games in China by the end of September 2025 [3][11] - **Advertising Sector**: - Marketing services revenue expected to sustain growth at approximately 20% year-over-year, aided by AI-powered ad technology and the growth of video accounts and mini shops [1][2] Financial Projections - **3Q25 Revenue Forecast**: - Total revenues projected to increase by 13.5% year-over-year to RMB 189.7 billion, with non-GAAP net profit expected to rise by 11% year-over-year to RMB 66.4 billion [2][10] - Online gaming revenues anticipated to grow by 17% year-over-year to RMB 60.6 billion, with domestic and international games expected to grow by 15% and 22% respectively [2][55] - **4Q25 Outlook**: - Potential offset of soft gaming seasonality by deferred revenues from previous quarters and marketing services revenue benefiting from e-commerce festivals [1][2] Core Financial Metrics - **Earnings Summary**: - 2025E Net Profit: RMB 255.3 billion, with a diluted EPS of RMB 27.596 [5][10] - Projected growth rates for sales revenue and core NPAT are 13.0% and 14.6% respectively for 2025 [10][55] Notable Game Titles and Performance - **Top Mobile Games**: - Honour of Kings (HoK) remains the top-grossing mobile game, followed by Delta Force, which has recently surpassed Peacekeeper Elite in grossing [12][17] - Delta Force's MAU reached 49.4 million in August 2025, indicating strong user engagement [20][21] - **New Game Releases**: - Tencent released four new titles in 3Q25, including Valorant Mobile, which performed well in downloads and grossing [48][51] - A solid pipeline of 96 mobile games is expected to support future revenue growth [52][55] AI and Technology Developments - **AI Integration**: - Tencent's Hunyuan 3D model has improved modeling accuracy by three times, with over 40% of new code generated by AI [4][1] - Continued growth in Tencent Cloud's international business, maintaining high double-digit growth over the past three years [4] Investment Recommendation - **Rating**: Maintain Buy - **Target Price**: HK$735, representing a potential upside of 12.8% from the current price of HK$651.50 [6][10] Conclusion - Tencent is positioned for a solid performance in 3Q25, driven by strong gaming revenues and advertising growth, with a robust pipeline of new games and advancements in AI technology. The company is expected to continue its leadership in the gaming sector while capitalizing on advertising opportunities.

Tencent scored one of the biggest hits in Chinese gaming with 2024's Delta Force. Now, the game's developer is being tasked with cracking the overseas market and navigating a domestic shift towards PCs and shooters. https://t.co/KFNuIS5pPW ...