Guohai Securities: Maintaining Tencent Holdings (00700)'s “Buy” Rating Target Price of HK$627

The Zhitong Finance App learned that Guohai Securities released a research report stating that Tencent Holdings (00700)'s 2026-2028 revenue is estimated to be 8233/9015/982.2 billion yuan, respectively, the net profit from non-IFRS caliber is 2663/2743/288.1 billion yuan, the corresponding non-IFRS EPS is 29/30/32 yuan, and the corresponding non-IFRS caliber PE is 13.0/12.6/12.0x. According to the SOTP valuation method, the total target market value of all businesses of Tencent Holdings in 2026 is 5.0 RMB trillion/HK$5.7 trillion, corresponding to a target price of HK$627, maintaining a “buy” rating.

Guohai Securities's main views are as follows:

Incidents:

On August 12, 2026, the company announced its 2026Q2 financial report. In 2026Q2, it achieved revenue of 204.8 billion yuan (yoy +11%, qoq +4%), operating profit of 67.3 billion yuan (yoy +12%, qoq -0.1%), net profit to mother of 56 billion yuan (yoy +0.7%, qoq -4%), non-IFRS operating profit of 75.6 billion yuan (yoy +9%, qoq +0.8%).

Opinions:

1. Operating data: WeChat traffic continued to grow in 2026Q2, with a consolidated MAU of 1,439 million (yoy +2%, qoq +0.5%); QQ smart terminal MAU rebounded to 520 million (yoy -2%, qoq +0.8%); registered accounts for paid value-added services amounted to 259 million yuan (yoy -1.9%, qoq -2.6%), and Tencent music-related music membership service revenue reached 4.79 billion yuan (yoy +8.1%).

2. Overall performance: Revenue and gross profit have maintained steady growth. Growth in high-margin self-developed games and marketing services has driven gross margin to continue to rise, and AI investment suppresses profit growth to a certain extent. 2026Q2 gross margin increased from 57% in the same period last year to 58% (yoy+0.9pct, qoq+1.2pct); non-IFRS operating profit increased 9% year over year. If new AI products were excluded, non-IFRS operating profit increased 19% year on year, and non-IFRS net profit increased 9% year on year to 68.4 billion yuan.

3. Value-added business: 2026Q2 revenue increased 8% year-on-year to 98.4 billion yuan, accounting for 48% of total revenue for the quarter, and gross margin increased to 64% from 60% in the same period in 2025. The game business performed steadily, and revenue increased 11% year over year to 65.9 billion yuan. Among them, game revenue in the local market/game revenue in the international market increased 17% year over year, respectively, and decreased by 1% year on year. Social networking business revenue increased 1% year over year, and the total usage time of video account users increased by more than 20% year over year.

4. Marketing services: 2026Q2 revenue increased 22% year-on-year to 43.6 billion yuan. The growth rate was further accelerated by 20% compared to Q1. Video channel traffic and advertising inventory continued to grow, and AI-driven advertising recommendation models were continuously optimized and superimposed on AIM+ platform upgrades to drive simultaneous increases in ad conversion efficiency and unit price.

5. Fintech and corporate services: 2026Q2 revenue increased 9% year-on-year to 60.3 billion yuan. Among them, the number of commercial payments increased year-on-year, and the decline in single amounts continued to narrow; cloud business revenue increased 20% + year over year, mainly benefiting from AI-related demand, international business expansion, and increased adoption of general cloud services, and continued improvement in profitability.