J.P. Morgan China/HK FTM 14 Jul 26: Tencent (0700); China Auto Industry; China Home Appliance; China Utilities & Renewables Blog; Macau Gaming. Mon Jul 13 2026

Research evidence excerpt

J.P. Morgan China/HK FTM 14 Jul 26: Tencent (0700); China Auto Industry; China Home Appliance; China Utilities & Renewables Blog; Macau Gaming. Mon Jul 13 2026

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China/HK First to Market 14 July 2026

Top Stories

Tencent (0700) (0700.HK, OW – HK$460.20), China (Alex Yao)

2Q26 preview: the second test of the two-P&L framework

We reiterate Overweight on Tencent and maintain our HK$690 price target, based on 20x 2027E P/E. Our

long thesis is that Tencent remains China Internet’s highest-quality compounder: durable user engagement,

improving games and advertising monetization, strong margins and balance-sheet capacity, and AI

optionality with credible monetization paths. While we admit Tencent’s near-term earnings path is becoming

less smooth, our core thesis has not weakened. We cut our FY26 adjusted EPS estimate by 5% after raising

our FY26 capex estimate to RMB200bn. The reduction reflects heavier AI investment and depreciation from

2H26, not deterioration in Tencent’s established businesses. For investors with a 12-month horizon, the

case remains attractive: own Tencent for the quality of the core franchise and receive AI optionality tied to

credible monetization paths. Investors requiring a near-term catalyst should recognize that the shares may

remain inexpensive until key signposts arrive.

| China Auto Industry, China (Nick Lai)

Preview and implications of 2Q26 earnings; d/g SAIC, GAC to UW