Komo: Tencent Holdings' (00700) revenue is expected to increase 9% in the next quarter, reaffirming the “gain” rating

The Zhitong Finance App learned that J.P. Morgan Chase released a research report stating that it reaffirmed the “increase” rating of Tencent Holdings (00700), and that the target price remained at HK$690. The bank believes that Tencent is still the highest quality compound interest growth stock on the Chinese Internet. It has long-lasting user engagement, continuously improving game and advertising monetization capabilities, strong profit margins and balance sheet strength, and AI options with effective monetization paths.

According to the report, due to Tencent's increased investment in AI and expected depreciation from the second half of this year, the bank lowered Tencent's 2026 non-IFRS earnings forecast by 5% to RMB 28.47 per share, and raised its capital expenditure forecast for 2026 to RMB 200 billion. However, the bank emphasized that the above adjustments reflect heavier AI investment and depreciation, rather than the deterioration of Tencent's existing core business.

J.P. Morgan predicts that Tencent's revenue for the second quarter of this year will increase by about 9% year-on-year, including revenue from value-added services by 5% to 6%, revenue from games by 9% to 10%, revenue from marketing services by 18% to 19%, and fintech revenue by about 5%, which is basically in line with market expectations.