J.P. Morgan Chase issued a report reaffirming its “gain” rating on Tencent and maintaining the target price of 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 28.47 yuan per share, and raised the 2026 capital expenditure forecast to 200 billion yuan. However, the bank emphasized that the above adjustments reflect heavier AI investment and depreciation, rather than the deterioration of Tencent's existing core business. The bank expects revenue to increase by about 9% year-on-year in the second quarter, with revenue from value-added services increasing by 5% to 6%, revenue from gaming by 9% to 10%, revenue from marketing services increasing by 18% to 19%, and fintech revenue by about 5%, which is basically in line with market expectations.

J.P. Morgan Chase issued a report reaffirming its “gain” rating on Tencent and maintaining the target price of 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 28.47 yuan per share, and raised the 2026 capital expenditure forecast to 200 billion yuan. However, the bank emphasized that the above adjustments reflect heavier AI investment and depreciation, rather than the deterioration of Tencent's existing core business. The bank expects revenue to increase by about 9% year-on-year in the second quarter, with revenue from value-added services increasing by 5% to 6%, revenue from gaming by 9% to 10%, revenue from marketing services increasing by 18% to 19%, and fintech revenue by about 5%, which is basically in line with market expectations.