CICC: Maintains "Outperform" rating on TENCENT (00700) with a target price of HK$666, bullish on WorkBuddy integrating the office ecosystem.

CICC released a research report maintaining an "Outperform" rating on TENCENT (00700) with a target price of HK$666, corresponding to 2026 and 2027 Non-IFRS P/E ratios of 20x and 19x respectively, implying 76% upside from the current share price. The bank maintained its 2026 and 2027 Non-IFRS earnings forecasts for the company unchanged. On October 29, the 2026 Tencent Global Digital Ecosystem Summit opened, where the company launched Buddy One, an integrated office suite built around WorkBuddy as the workbench, simultaneously launched Tencent Drive as a unified storage product, and announced that Hunyuan Hy4 and Hy4 Flash will be released soon. CICC's key views are as follows: WorkBuddy serves as the unified entry point for the integrated launch of Buddy One The Buddy One suite launched this time is a cross-product account system centered on WorkBuddy. Tencent Meeting, Tencent Docs, ima, and the newly launched Tencent Drive all uniformly call WorkBuddy's Agent foundation for their underlying AI capabilities, with unified accounts, credit pools, and data pools. The VIP tier is priced at RMB700 for continuous monthly subscription. Buddy One integrates Tencent's fragmented office product lines into a single Agent-centric system. The bank believes that the previously identified baseline advantage continues to materialize, namely horizontal integration and revitalizing existing resources within the system; at the same time, in the dimension of intelligent capability competition (models, Harness, context), it further reinforces Tencent's unique context moat: 1) WorkBuddy has the capacity to serve as an entry point. Since its launch in March, its business has expanded rapidly. According to Analysys data for September, WorkBuddy had approximately 85.34 million monthly visits, maintaining its leading position among mainstream desktop AI office agents, with continued penetration on the enterprise side. 2) The office ecosystem is connected. Meeting, Docs, ima, and Drive maintain competitiveness through unified Agent capabilities, avoiding working in silos, and integrating all office assets around WorkBuddy as the axis, paving the way in an orderly manner for subsequent AI monetization in office scenarios. Model capabilities and infrastructure costs constitute dual-line supply The company expects the official version of Hunyuan Hy4 to be released soon, strengthening long-horizon task capabilities, improving chain-of-thought Token usage efficiency, and adding visual understanding; Hy4 Flash is positioned to offer higher cost-effectiveness. Meanwhile, the supply side of Agent models remains open, with TokenHub providing unified access to external models such as DeepSeek, GLM, MiniMax, and Kimi. On the computing power front, Tencent Cloud has built heterogeneous computing clusters and adapted to multiple domestic chips, reducing supply constraints. On the infrastructure front, the upgraded Agent Runtime covers five areas: context management, tool invocation, security sandbox, observability, and evaluation, avoiding paying computing costs idly for Agents that are waiting. This foundation will also simultaneously support Hunyuan's reinforcement learning training and the growth in WorkBuddy's invocation volume. Risk warnings Macroeconomic uncertainty; regulatory factors; costs or expense ratios higher than expected.