Bank of America: Raises Tencent Holdings Limited target price to HKD 690, rating "Buy"
Bank of America released a research report stating that Tencent's performance in the second quarter exceeded expectations, with revenue growth accelerating to 15% year-on-year, reaching RMB 185 billion (3% higher than expected). The expansion of gross margins across various businesses offset the cost impact brought by artificial intelligence. Adjusted operating profit grew 18% year-on-year, reaching RMB 69 billion (4% higher than expected). The bank raised its target price from HKD 631 to HKD 690 and reiterated its "Buy" rating. The bank holds a positive view on the group's business growth and has raised its profit forecasts for the group from 2025 to 2027 by 2%. Entering the second half of the year, the bank expects advertising business to maintain a growth rate higher than the industry average, FBS will further recover, game revenue will be supported by evergreen games, and there is potential for new games to rise, with operating profit continuing to grow
According to the Zhitong Finance APP, Bank of America released a research report stating that Tencent Holdings (00700) performed better than expected in the second quarter, with revenue growth accelerating to 15% year-on-year, reaching RMB 185 billion (3% higher than expected). The gross margins of various businesses expanded, offsetting the cost impact brought by artificial intelligence. Adjusted operating profit grew by 18% year-on-year, reaching RMB 69 billion (4% higher than expected). The bank raised its target price from HKD 631 to HKD 690 and reiterated its "Buy" rating.
The bank holds a positive view on the group's business growth and has raised its profit forecast for the group by 2% for 2025 to 2027. Entering the second half of the year, the bank expects the advertising business to maintain a growth rate higher than the industry average, FBS to further recover, game revenue to be supported by evergreen games, and new games to have rising potential, with operating profit continuing to grow
