HKD831.7M Southbound Trading Net Inflow to TENCENT

The analyst rating from Daiwa for TENCENT is a "Buy" due to several key reasons: 1. Prioritization of GPU Resources: TENCENT is focusing on utilizing GPU resources for internal model training and enhancing its core businesses, which is expected to yield more certain returns. 2. AI Adoption: The integration of AI is anticipated to amplify the value of WeChat's core interface, improving functionalities such as chat, search, video accounts, content summarization, interaction, and mini-programming. 3. Gaming Business Development: The adoption of AI is expected to boost TENCENT's gaming business by reducing costs and refining game content innovation. The company plans to update existing games and launch new evergreen games, which contributes to confidence in its growth prospects. 4. Top Pick in the Sector: Daiwa emphasizes that TENCENT is its top pick in the Chinese internet sector, reinforcing their positive outlook on the company's future performance. Overall, these factors lead Daiwa to maintain a positive rating with a target price of HKD750.

The article provides analyst ratings for various stocks, including Alibaba Group Holding (BABA.US), which has a "Buy" rating with a target price of US$225. The reasons for the ratings are not explicitly detailed in the provided text. However, the context suggests that the analysts are optimistic about the future performance of these companies, as indicated by the "Buy" ratings for several stocks, including Baidu, NetEase, JD.com, and others. For Meituan-W (03690.HK), which has a "Neutral" rating, the article mentions that Daiwa expects the Keeta loss to widen next year, which may have influenced the more cautious stance. Overall, the ratings seem to reflect analysts' expectations of growth or recovery in the respective companies, while the neutral or lower ratings may indicate concerns about specific challenges or losses.

The analyst rating from Morgan Stanley regarding ByteDance's Doubao AI smartphone assistant is influenced by the belief that while the feature envisions a rich ecosystem, its execution faces significant challenges. The report highlights that major smartphone OEMs and super apps are more inclined to develop their own AI assistants rather than collaborate with ByteDance, which poses substantial obstacles for OEM cooperation. The need for deep technical cooperation and commercial negotiations, along with the potential redefinition of smartphone value propositions, further complicates the implementation of the Doubao assistant. Consequently, Morgan Stanley maintains an Overweight rating on app-related stocks like TENCENT, BABA-W, and MEITU, viewing them as top picks for AI investment despite the challenges faced by ByteDance.

The analyst rating from JPMorgan's 2026 outlook report for Hong Kong stocks is based on the expectation that certain Chinese companies will benefit from the AI supercycle. The report highlights top picks among Cloud Service Providers (CSPs) and Artificial Intelligence Data Centers (AIDCs), indicating a positive outlook for these sectors. Specifically, companies like Alibaba (BABA-W) and Tencent are noted for their potential in cloud intelligence, while other firms in the AIDC space are also recognized for their growth prospects. The overall sentiment reflects confidence in the growth of these sectors driven by advancements in artificial intelligence.