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CLSA Forecasts TENCENT 2026 Capex at RMB200B; High Conviction Outperform Rating Reiterated
2026-08-13 11:14:46
CLSA issued a research report covering TENCENT (00700.HK), of which 2Q26 results were in line, with total revenue and adjusted EBIT growing 11% YoY and 9% YoY, respectively. Online gaming and advertising maintained solid growth, gross margin expanded, while cloud business revenue accelerated on AI demand.

Excluding AI-related products, adjusted EBIT grew 19% YoY, reflecting TENCENT's increased AI investments, with R&D expenses rising 35% YoY and capex spiking 176% YoY.

The broker expected TENCENT's capex for 2026 may reach RMB200 billion, and therefore lowered its adjusted net profit forecasts for 2027 and 2028 by 2% and 6%, respectively.

However, Xiaowei is set to expand trial usage soon, while Hy4 is also expected to be launched later this year. The broker believed these developments would further drive a valuation re-rating for the company.

The broker reiterated its High Conviction Outperform rating on TENCENT, with a TP of HKD740.
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AASTOCKS Financial News
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