Yamato: Maintain a "buy" rating for Tencent (00700) with a target price of HKD 750.

Yamato released a research report stating that they recently held a non-transactional roadshow with Tencent (00700) and after exchanging views with the company's management, they believe that Tencent is currently prioritizing the use of GPU resources for internal model training and strengthening core businesses, which is expected to bring higher certainty of returns. Tencent is the preferred stock in the Chinese internet sector, with a reiterated "buy" rating and a target price of HK$750, corresponding to a forecasted price-to-earnings ratio of 20.6 times in 2026. The report indicates that Tencent is using AI technology to drive ecosystem integration, which is expected to further enhance the value of the WeChat core interface, enabling empowerment in areas such as chatting, searching, video accounts, content summarization and interaction, and mini program development. At the same time, Tencent is also promoting the development of its gaming business, helping to reduce costs and strengthen innovation in game content. It is expected that Tencent will focus on updating existing games and launching new long-lasting games next year, maintaining confidence in the growth of its gaming business.