TENCENT HOLDINGS (+) : What is management saying?

Research evidence excerpt

TENCENT HOLDINGS (+) : What is management saying?

EQUITIES

INTERNET & MEDIA

TENCENT HOLDINGS OUTPERFORMPRICE* HKD449.2  TARGET PRICE HKD750 (UPSIDE 67%)

What is management saying?

This morning we hosted Tencent’s Chief Strategy Office James Mitchell and HoIR Wendy Huang as19 MAY 2026

Securities Research Report part of their post Q126 roadshow. The company provided on upbeat overview of AI’s impact on their

Production time: 16:46* (London time)

core business, with significant optionality in new services, while also discussing investments and

Research Analysts & Publishing Entities

potential risks. The buyback is set to remain a priority amidst recent share price pressure. We remain

William Packer Outperform and expect accelerating revenue growth and an improving AI narrative to bring re-ratingBNP Paribas London Branch

(+44) 207 039 9509 upside. We explored Tencent’s AI risk and opportunities in our report (We)Chat GPT? Outperform.

william.packer@uk.bnpparibas.com

Key messages on Gen AI (agentic, ads, capex, competition)

1/ Elevated ad growth (c20% FY23-Q126) driven by AI tailwinds (improved ad target and ad service

automation) and sustainable for the medium term. 2/ Gen AI offers significant optionality across

Tencent’s portfolio in new areas including monetising power users of productivity tools via tokens

and cloud services for enterprise (eg GPU renting) in the shorter term. The company framed a major

medium-term opportunity via Agentic services in mini programmes. In our view, Tencent is uniquely

well placed in agentic services via its huge WeChat user base with embedded payments, social

graph, physical graph and existing integration with mini programme partners. 3/ Stable competitive

environment in gaming despite fast moving AI backdrop (both China and globally).