Haitong International: Lowering the target price of Tencent Holdings (00700) to HK$470. The adjusted operating profit for the third quarter is expected to drop 5% year-on-year

The Zhitong Finance App learned that Haitong International released a research report stating that the target price of Tencent Holdings (00700) was slightly lowered by 2% to HK$470 to reflect a reduction in earnings forecasts per share and maintain a “superior to market” rating; the bank expected Tencent's third-quarter revenue to 21.2 billion yuan, up 9% year on year, and adjusted operating profit of 68.8 billion yuan, down 5% year on year, mainly due to artificial intelligence-related depreciation and product investment reflected in revenue costs and operating expenses. The bank expects Tencent's revenue to be 883.3 billion yuan in 2023 billion yuan, up 10% year on year, and adjusted net profit of 265.5 billion yuan, up 2% year on year.

In terms of game business, the bank indicates that domestic games are still the main foundation. Tencent continues to lead the market. Sensor Tower ranked “Wang Zhe Rongyao” as the world's highest-grossing mobile game for July, August, and September 2026. In August, a total of five Tencent games entered the top ten global revenue growth. However, the bank expects revenue from international games to drop 6% year on year to RMB 19.5 billion, mainly due to fewer new game launches and high base effect. Among them, “GTA VI” is scheduled to be launched in November 2026, which will increase players' attention and budget competition; international game revenue for the third quarter of 2025 increased 43% year on year, driven by sales of Supercell's games and “Dying Light: The Beast”.

The bank expects that marketing service revenue will still be driven by video accounts, but growth may slow down as Miniclip's in-app advertising contributions subsided in the previous quarter, and the macro environment is still weak. The bank also expects the payment business to remain weak, as macroeconomic conditions drag down transaction volume; corporate services are driven by rising cloud demand and a positive pricing environment, which can partially offset the pressure.

According to Haitong International, artificial intelligence is still Tencent's strategic investment focus. Short-term depreciation will still drag down financial performance, but Tencent favors disciplinary deployment rather than automatically speeding up spending quarterly.