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2026-10-16 10:37:34 UBS published a report expecting TENCENT (00700.HK)'s third-quarter revenue growth to slow to 7% YoY, while adjusted net profit is forecast to fall 7% YoY to RMB65 billion, mainly due to the drag from AI investment and a likely decline in profit contribution from associates as a result of reduced holdings and weaker earnings at KUAISHOU-W (01024.HK). The broker expects domestic gaming growth to slow to a 12% YoY increase, while international gaming revenue is expected to decline 3% YoY. Advertising revenue is forecast to rise 18% YoY, while fintech and business services are expected to remain broadly stable with 8% YoY growth. Gross profit is expected to increase 9% YoY, with gross margin reaching 57.2%. However, amid rising depreciation and AI operating expenses, adjusted operating profit is expected to turn lower by 2% YoY to RMB71 billion. Excluding AI investment, adjusted operating profit would still rise 13% YoY. The broker lowered its 2026-2028 adjusted EPS forecasts by 2% to 5% and cut the TP from HKD770 to HKD740, while reiterating the Buy rating. It believes the current valuation remains attractive for long-term investors.(ha/j)~ AASTOCKS Financial News Website: www.aastocks.com This article was automatically translated by AI, the Chinese version should be considered the authoritative version. AASTOCKS.com Limited does not guarantee its accuracy or completeness and accepts no liability for any damages or losses arising from the use of this translation. | |