Broker Name: UOB Kay Hian
Date of Report: 22 April 2026
Excerpt from UOB Kay Hian report
Report Summary
- Stock: Tencent Holdings (700 HK)
- Action: BUY (Maintained)
- Target Price: HK\$728.00 (lowered from HK\$757.00)
- Key Highlights:
- Tencent will report 1Q26 results on 13 May. Revenue growth is expected to remain solid at 11% yoy, with resilient gaming and stable advertising as main drivers.
- Online games revenue is forecast to grow 12.4% yoy in 1Q26, supported by a robust game pipeline and key title launches such as Honor of Kings: World.
- Marketing services revenue is expected to grow 18% yoy in 1Q26, driven by enhancements in AI ad targeting.
- Tencent Cloud is projected to expand revenue by 25% yoy, with new AI agent solutions supporting growth.
- Heavy AI-related investment will pressure margins, leading to a 3-4% trim in 2026 net profit estimates.
- Key risks include regulatory changes and potential slowdown in gaming revenue growth.
- Actionable Insight: Investors are advised to BUY Tencent Holdings with a target price of HK\$728.00, reflecting confidence in the company’s AI and gaming-driven growth, despite margin pressures from increased AI investment.
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