HSI Declines by 108 Points; BABA-W Struggles; Chip Sector Remains Strong

Written by Emily J. Thompson, Senior Investment Analyst

00700-0.42%

00981+0.32%

01024+2.72%

Source: aastocks

Updated: Jan 07 2026

0mins

Source: aastocks

US Market Performance: The DJIA and S&P 500 reached new highs, while Hong Kong stocks opened lower, with the HSI down 108 points (0.4%) and other indices also showing declines.
Tech Sector Movements: Major tech stocks like TENCENT and BABA-W opened lower, with significant short selling activity reported for both, while some chip stocks like SMIC and HUA HONG SEMI saw slight gains.
Xiaomi's New Launch: Lei Jun announced that the new generation XIAOMI-W will feature LiDAR technology and is expected to launch in April, with the stock opening flat.
Auto Stocks Update: Various auto stocks, including BYD, XPENG, and NIO, opened lower, with LEAPMOTOR raising RMB3 billion through domestic shares but also seeing a decline in its share price.

00700

$595+Infinity%1D

Analyst Views on 00700

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

0 Buy

0 Hold

0 Sell

Current: 597.500

Low

Averages

High

Current: 597.500

Low

Averages

High

Citi Research

Citi

Buy

maintain

$783

2026-01-23

New

Reason

Citi Research

Citi

Price Target

$783

AI Analysis

2026-01-23

New

maintain

Buy

Reason

The analyst rating from Citi Research for TENCENT (00700.HK) is based on several key factors: 1. AI Strategy and Restructuring: The company has recently accelerated its AI team restructuring and model updates, which is expected to be a focal point during the upcoming earnings release conference. This indicates a proactive approach to enhancing its AI capabilities, particularly within the WeChat ecosystem. 2. Market Performance: TENCENT's share price has declined by 0.25% year-to-date, which is seen as underperforming the market. This decline is viewed by the broker as a better buying opportunity, suggesting that the current price may not reflect the company's potential for growth. 3. Earnings Expectations: The upcoming 4Q25 results are anticipated to show solid performance, driven by resilient growth in gaming, stable advertising revenue, and strong growth in the overseas cloud business. These factors are expected to partially offset weaknesses in the fintech sector. 4. Investment in AI: The company's increased investment in AI talent and capital expenditure is expected to narrow the gap between revenue growth and gross/operating profit growth in the upcoming quarter. Based on these insights, Citi Research has reiterated a "Buy" rating and raised the target price to $783, while also placing the stock on a 90-day positive catalyst watch.

JPMorgan

Overweight

maintain

$750

2026-01-23

New

Reason

JPMorgan

Price Target

$750

2026-01-23

New

maintain

Overweight

Reason

The analyst rating for TENCENT (00700.HK) is "Overweight" based on several factors outlined in the report. JPMorgan notes that TENCENT's core businesses, particularly within the WeChat ecosystem, advertising, and gaming, remain resilient. However, the company is at an earlier stage in deploying generative AI compared to its peers, as management has prioritized reliability, compliance, and ecosystem compatibility over rapid scale expansion. This cautious approach results in the stock being less "AI-priced." The potential for upside value exists if TENCENT can demonstrate effective execution and product-market fit in the coming year. Despite lowering its 2026 adjusted EPS forecast by 1%, the target price remains at $750, supporting the positive rating.

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UOB Kay Hian

maintain

$800

2026-01-22

New

Reason

UOB Kay Hian

Price Target

$800

2026-01-22

New

maintain

Reason

The analyst rating for TENCENT (00700.HK) is maintained as a "Buy" by UOB Kay Hian due to several positive factors. Despite facing macroeconomic challenges and the impact of advertising spending tax, TENCENT is expected to achieve robust revenue growth of 13% year-over-year in 4Q25. Key catalysts for this growth include the launch of flagship new games in 2026, improvements in AI-driven advertising placement efficiency, and the introduction of AI-powered mini-program code development tools on WeChat. The target price remains unchanged at HKD800.

Daiwa

Buy

downgrade

$750 -> $725

2026-01-21

New

Reason

Daiwa

Price Target

$750 -> $725

2026-01-21

New

downgrade

Buy

Reason

The analyst rating for TENCENT (00700.HK) was reaffirmed as a "Buy" despite a lowered target price from HKD750 to HKD725. The reasons for this rating include expectations of a seasonal slowdown in the domestic gaming business and stabilization in the international gaming business after a strong previous quarter. Additionally, the recruitment of AI talent and GPU leasing costs are anticipated to pressure operating expenses. The broker adjusted its revenue forecasts, estimating a 12% year-over-year increase in local gaming revenue for 4Q25, but a 13% quarter-over-quarter decline, leading to a reduction in TENCENT's EPS forecast for 2026-27 by 1-2%.

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.