M Stanley Reveals Ranking of Preferred CN Dotcoms (Table)

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.

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.