Citibank: Tencent (00700) WeChat “Xiaowei” is expected to become the ultimate consumer AI agent in China to maintain a “buy” rating

The Zhitong Finance App learned that Citi released a research report stating that it reaffirmed the “buy” rating of Tencent Holdings (00700), with a target price of HK$765. The bank believes that WeChat's unique position of “Xiaowei” is expected to become the ultimate consumer AI agent in China. Instead of launching an independent app, Tencent embeds “Xiaowei” natively into WeChat, directly utilizing its huge monthly active user base, proprietary social graph, and established and verified applet e-commerce tracks.

The bank pointed out that compared to Meta's establishment of a third-party connector, as well as domestic peers such as Alibaba-W (09988) and ByteDance, or facing greater API resistance under China's “walled garden,” WeChat's relatively neutral platform positioning and established vertical partnerships are expected to provide an unparalleled distribution and transaction moat. Similar to Meta's Muse, the bank believes that with the take-off of agency commerce in China, “Xiaowei” can unlock considerable long-term monetization opportunities through trading and advertising.

According to the bank, Tencent has tested the “Xiaowei” proxy function with selected business partners since June, and is expected to connect to a wider range of ecosystem partners in the long term and independently execute more complex user processes and transactions within WeChat.