Market Rally: China's gaming and entertainment sector saw significant growth in 2025, with medium- and large-cap stocks rising by 50-80%, continuing into early 2026, driven by valuation expansion and earnings growth.
Goldman Sachs Insights: The firm remains optimistic about the sector's risk-reward profile, favoring companies with new growth potential, particularly in AI applications and overseas expansion, while addressing competitive pressures from ByteDance.
Core Stock Picks: Goldman Sachs has identified TENCENT, NTES-S, Kuaishou, Bilibili, and Tencent Music as key investment opportunities, with TENCENT expected to maintain steady growth in its core gaming and advertising businesses.
TENCENT's Future: Despite lowering its target price for TENCENT, Goldman Sachs maintains a Buy rating, highlighting the company's role in AI applications and its potential for sustained growth through its product pipeline and monetization strategies.
Wall Street analysts forecast 00700 stock price to rise over the next 12 months. According to Wall Street analysts, the average 1-year price target for 00700 is USD with a low forecast of USD and a high forecast of USD. However, analyst price targets are subjective and often lag stock prices, so investors should focus on the objective reasons behind analyst rating changes, which better reflect the company's fundamentals.
0 Analyst Rating
Wall Street analysts forecast 00700 stock price to rise over the next 12 months. According to Wall Street analysts, the average 1-year price target for 00700 is USD with a low forecast of USD and a high forecast of USD. However, analyst price targets are subjective and often lag stock prices, so investors should focus on the objective reasons behind analyst rating changes, which better reflect the company's fundamentals.
0 Buy
0 Hold
0 Sell
Current: 617.500
Low
Averages
High
Current: 617.500
Low
Averages
High
Goldman Sachs
Goldman Sachs
Buy
downgrade
$770 -> $752
Al Analysis
2026-01-19
New
Reason
Goldman Sachs
Goldman Sachs
Price Target
$770 -> $752
Al Analysis
2026-01-19
New
downgrade
Buy
Reason
The analyst rating from Goldman Sachs for TENCENT is a "Buy" due to several key reasons:
1. Core Business Growth: Goldman Sachs believes that TENCENT's core businesses, which include gaming and advertising, will continue to experience low- to mid-teens growth annually. This is supported by the sustainability of its evergreen games and a strong product pipeline.
2. Monetization and AI Benefits: The company is expected to benefit from advancements in monetization strategies and the integration of AI into its advertising ecosystem, which could enhance revenue generation.
3. AI Application Potential: Goldman Sachs views TENCENT as an important player in the application of AI, suggesting that its involvement in this area could drive future growth.
4. Overall Sector Outlook: The broader gaming and entertainment sector in China has shown strong performance, and Goldman Sachs considers the risk-reward profile for the sector to still be attractive, particularly for companies with new growth potential.
Despite lowering the target price from HKD770 to HKD752, the positive outlook on TENCENT's growth prospects and its strategic positioning in the market supports the continued "Buy" rating.
Nomura
Buy
maintain
$775
2026-01-19
New
Reason
Nomura
Price Target
$775
2026-01-19
New
maintain
Buy
Reason
Nomura maintained a "Buy" rating on TENCENT due to expectations of a 12% year-over-year revenue increase in 4Q25, which aligns with market consensus, and a projected 15% growth in non-IFRS net profit, despite being slightly lower than the latest market forecast. The anticipated increase in gross margin and operating profit margin further supports their positive outlook, leading to a target price of $775.
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HSBC
HSBC Global Research
Buy
maintain
$770
2026-01-16
New
Reason
HSBC
HSBC Global Research
Price Target
$770
2026-01-16
New
maintain
Buy
Reason
The analyst rating for TENCENT (00700.HK) is maintained at "Buy" by HSBC Global Research due to several positive factors. The company's game and advertising business is described as healthy, with the game "Assault Fire" performing strongly and a low risk of market erosion for new versions. Additionally, advancements in AI technology in recruitment and organizational restructuring, along with a large user base that serves as a core competitive advantage, support the positive outlook. Despite lowering the non-IFRS net profit forecasts for 2025-2027 by 1-2%, the overall assessment remains optimistic, leading to the "Buy" rating and a target price of $770.
Daiwa
maintain
2026-01-16
New
Reason
Daiwa
Price Target
2026-01-16
New
maintain
Reason
The analyst rating from Daiwa is based on several factors. They noted an earlier-than-usual "spring rally," which may lead investors to take profits ahead of significant events like the Lunar New Year holiday and the Two Meetings of the PRC (NPC and CPPCC Meetings). Despite this potential profit-taking, Daiwa expects liquidity support and stimulus policies to bolster the A-share market. However, they anticipate that the upward momentum will slow, resulting in a "slow bull market."
Daiwa maintains a positive outlook for the market in the first half of 2026 and recommends a balanced equity allocation between mainland China and Hong Kong stock markets. They express optimism about specific sectors, particularly Hong Kong's internet and high-dividend stocks, as well as the A-share technology hardware and equipment sector.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
