> **来源：[研报客](https://pc.yanbaoke.cn)** # Tencent (700 HK) Summary ## Core Content Tencent reported its 1Q26 earnings, showing **resilient growth** despite increased AI investment. The company maintained a strong performance across its core businesses and demonstrated **solid progress in AI**. The financial metrics and forecasts suggest continued growth and stability in key areas. ## Main Points ### Earnings Performance - **Total Revenue**: Grew by 9% YoY to RMB196.5 billion, slightly below the Bloomberg consensus estimate. - **Non-IFRS Operating Income**: Increased by 9% YoY to RMB75.6 billion, in line with expectations. - **Non-IFRS Operating Profit Excluding AI Investment**: Rose by 17% YoY to RMB84.4 billion, indicating strong operating leverage. - **Earnings Impact from AI Investment**: c.RMB9 billion in 1Q26, consistent with management's guidance of over RMB36 billion for FY26E. - **Earnings Forecasts (FY26E–FY28E)**: Remain largely unchanged, with a target price of HK\$750.0. ### Core Business Growth - **Games Revenue**: Grew by 8% YoY to RMB64.2 billion, with **domestic games** up 6% and **international games** up 13%. The growth decelerated due to the later Spring Festival timing. - **Marketing Services Revenue**: Increased by 20% YoY to RMB38.2 billion, driven by AI improvements in ad performance and pricing. **AIM+** already powers c.30% of total marketing spending. - **Fintech and Business Services Revenue**: Grew by 9% YoY to RMB59.9 billion, with **business services** up 20% YoY, supported by cloud and e-commerce growth. **Commercial payment volume** also increased. ### AI Progress - **LLM & Agentic AI**: Tencent made solid progress in the development of **HY3 Preview** and **WorkBuddy**. - **HY3 Preview**: Ranked top in token usage on OpenRouter (23 Apr–12 May), showing **comprehensive intelligence** and **strong cost efficiency**. - **WorkBuddy**: Achieved solid user growth with **over 80% retention rate** among paying users and is now the **most popular productivity AI agent service in China** by DAU. - **Future Focus**: The LLM team will build **larger parameter models** using a **bigger and more quality dataset**, enhancing the HY model's competitiveness and expanding use cases. ### Margins and Valuation - **Non-IFRS OPM**: Flattish YoY at 38.5%, but **excluded AI investment**, it expanded by c.3ppt to 43.0%. - **Valuation**: The SOTP-derived target price of HK\$750.0 is based on **core business valuations** and **strategic investments**. - **Current Valuation**: 15x FY26E non-IFRS PE, which the firm considers **attractive in terms of risk-reward**. ## Key Information ### Financial Highlights - **Revenue (FY26E)**: RMB823.8 billion - **Adjusted Net Profit (FY26E)**: RMB276.5 billion - **EPS (Adjusted)**: RMB30.4 - **Consensus EPS (FY26E)**: RMB30.4 - **P/E (FY26E)**: 15x ### Shareholding and Stock Data - **Market Cap**: HK\$4,147,430.1 million - **Average 3-Month Turnover**: HK\$13,422.3 million - **52-Week High/Low**: HK\$677.50 / HK\$457.20 - **Total Issued Shares**: 8,965.5 million ### Shareholding Structure - **MIH TC**: 22.8% - **Advance Data Services Limited**: 7.8% ### Share Performance - **1-Month**: -5.6% (Absolute), -8.2% (Relative) - **3-Month**: -13.0% (Absolute), -12.0% (Relative) - **6-Month**: -29.5% (Absolute), -27.7% (Relative) ### Valuation Breakdown (HK\$) - **Games Business**: HK\$349.5 (based on 24x 2026E PE) - **SNS Business**: HK\$31.3 (based on 3.5x 2026E PS for Tencent Video and other services) - **Marketing Services Business**: HK\$150.1 (based on 22x 2026E PE) - **Fintech Business**: HK\$105.7 (based on 4.5x 2026E PS) - **Cloud Business**: HK\$33.4 (based on 4.5x 2026E PS, at a discount to the industry average) - **Strategic Investments**: HK\$71.1 (based on current market value and book value, with a 30% discount applied) - **Net Cash**: HK\$8.7 ### Valuation Per Share (HK\$) - **Core Business**: HK\$678.7 - **Strategic Investments**: HK\$71.1 - **Total Valuation**: HK\$750.0 ## Conclusion Tencent's 1Q26 results show **resilient earnings growth**, with strong performance in core businesses like **games, marketing services, and fintech**. The company is making **significant progress in AI** with products like HY3 and WorkBuddy, and its **operating leverage** remains robust despite increased AI investment. The **current valuation** is seen as **attractive**, and the firm **reiterates its BUY recommendation**.