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Investing.com - Benchmark raised its price target on Tencent Holdings (HK:0700) (OTC:TCEHY) to HK$700 from HK$660 while maintaining a Buy rating following the company’s second-quarter results.
The Chinese technology giant delivered what Benchmark described as a "stellar" second quarter, with revenue growth accelerating to mid-teens, reaching its highest level in four years. This growth was driven by strong performance across key business segments.
Tencent’s online games division outperformed expectations despite a high comparison base, supported by a mix of established titles and successful new releases like Delta Force. The advertising segment exceeded forecasts with 20% year-over-year growth, benefiting from AI-enhanced user engagement and improved advertising technology conversion.
The Financial and Business Services (FBS) segment surprised analysts positively, showing stabilization in commercial payments and improving growth in business services and consumer loans. Benchmark noted that AI has become an increasingly important growth driver across Tencent’s core businesses.
Looking ahead, Benchmark sees further upside potential in the second half of 2025, supported by strong momentum across segments and a continued shift toward a higher-quality revenue mix, which is driving margin expansion despite ongoing AI investments.
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