Goldman Sachs: Raises Tencent's target price to HK$701, still a core investment choice in the Chinese internet industry.

Goldman Sachs recently released a research report stating that Tencent Holdings had strong performance in the second quarter, achieving the fastest revenue growth in four years and the highest gross profit margin in history. This reinforces the view of the bank that Tencent is one of the most advantageous companies in the Chinese internet industry, leveraging its unique WeChat ecosystem and global gaming assets to drive growth in all business lines through the application of artificial intelligence. Two major high-quality revenue sources have maintained year-on-year growth of 20% or more for two consecutive quarters. Goldman Sachs raised its revenue and earnings per share forecasts for Tencent for 2025 to 2027 by 1% to 6%, due to the stability of its gaming business as a platform, the expansion of the long-term growth runway for marketing services, the recovery of financial technology growth, and the acceleration of growth in cloud/e-commerce, driving continued operational leverage. Goldman Sachs raised Tencent's 12-month target price from 658 Hong Kong dollars to 701 Hong Kong dollars, maintaining a "buy" rating, and continuing to be the bank's core investment choice in the Chinese internet industry, with gaming being the bank's preferred sub-industry.