Morningstar: Maintaining a fair value of HK$780 per share for Tencent Holdings (00700), Muse tops the app list or brings benefits

The Zhitong Finance App learned that Morningstar released a research report stating that it maintains a fair value forecast of HK$780 per share for Tencent Holdings (00700), which has a broad economic moat. The personal AI assistant Muse launched by Meta (META.US) topped the US iOS App Store list, sending a positive signal that consumers are in strong demand for AI agents, even though users' willingness to pay has yet to be verified.

On September 22, Muse reached the top of the US App Store and led Meta's stock price to soar 11%. Affected by this, Tencent's stock price rose 7% during the day. Investors see Muse's market popularity as a positive sign for Tencent, because Tencent is also testing a similar AI agent “Xiaowei” within WeChat.

Morningstar pointed out that Muse's success did not change its forecast for Tencent's performance, but it challenged the market's previous assumption that the economic value of Tencent's AI smart business was minimal or even negative. It was this view that caused Tencent's stock price to drop nearly 30% since this year.

Currently, Morningstar's fair value estimates are not included in the “small and micro” business. Compared to Muse, Xiaowei has structural advantages. It is rooted in the most used application “WeChat” in China, and Muse is an application that requires a separate download. Morningstar believes there are three potential ways to monetize: one is to extract commissions from transactions facilitated by intelligence; the second is to use richer user intent signals collected by Xiaowei to achieve more accurate advertising, thereby increasing advertising revenue; and the third is to launch paid subscription service ratings for users using advanced AI features. Currently, none of these revenue sources are included in its valuation.