July 13, 2025 10:00 PM GMT Tencent Holdings Ltd. | Asia Pacific 2Q25 Preview: Solid Revenue and Earnings Growth | What's Changed | | | | --- | --- | --- | | Tencent Holdings Ltd. (0700.HK) | From | To | | Price Target | HK$630.00 | HK$650.00 | We see 2Q revenue and non-IFRS OP rising 11% and 14%, respectively, with solid games and ads growth, while FBS growth sees slight recovery. We expect narrower OP leverage driven by AI investment, but margins should continue to expand. Reiterate Top Pick, best 2C AI ap ...

Focus areas of earnings call. These include: (1) AI updates across different segments and Yuanbao strategies; (3) domestic online gaming strategies, such as updates on rejuvenating existing games (e.g. HoK, PKE) and emerging franchises; (4) mini-games and new domestic games (e.g. Valorant Mobile, Honour of Kings World) in the pipeline; (5) overseas gaming strategies; (6) advertising outlook and trends across different industry categories; (7) updates on Mini Shop strategies and competitive landscape; (8) fi ...

China Internet Equities How to position for 2H25 China Emerging themes and observations: 1) Content consumption: Demand in the games and entertainment sub-sectors has been more resilient than goods and services y-t-d. Good content takes time and resources to curate, setting a high entry barrier for newcomers. This acts as a defensive earning buffer for top content providers like Tencent and NetEase. 2) AI outlook: Lower-than-expected capex and cloud revenue growth has dented the market's confidence about th ...