--- title: "CICC: Tencent Holdings' first-quarter net profit meets expectations, AI investment is proactive and controllable, maintaining an \"outperform industry\" rating" type: "News" locale: "en" url: "https://longbridge.com/en/news/286519450.md" description: "CICC released a research report stating that Tencent Holdings' non-IFRS net profit in the first quarter increased by 11% year-on-year, in line with expectations. Revenue in the first quarter grew by 9%, below expectations. It is expected that domestic game revenue will increase by 12% in the second quarter, and overseas revenue will grow by 10%. Advertising revenue increased by 20%, and financial services grew by 7%. Tencent's investment in AI is proactive and controllable, with stable profitability in its core business, and it is expected that adjusted operating profit will increase by 7% in the second quarter" datetime: "2026-05-15T06:41:03.000Z" locales: - [zh-CN](https://longbridge.com/zh-CN/news/286519450.md) - [en](https://longbridge.com/en/news/286519450.md) - [zh-HK](https://longbridge.com/zh-HK/news/286519450.md) --- # CICC: Tencent Holdings' first-quarter net profit meets expectations, AI investment is proactive and controllable, maintaining an "outperform industry" rating According to the Zhitong Finance APP, China International Capital Corporation (CICC) released a research report stating that Tencent Holdings Limited (00700) saw a year-on-year increase of 11% in Non-IFRS net profit for the first quarter, in line with market expectations. However, due to the impact of deferred revenue, first-quarter revenue increased by 9% year-on-year, which was below market expectations. CICC maintains its revenue and Non-IFRS net profit forecasts for Tencent for this year and next. It maintains an "outperform" rating with a target price of HKD 666, corresponding to a forecasted Non-IFRS price-to-earnings ratio of 20 times for this year. The report states that Tencent's gaming business saw significant revenue growth in the first quarter, with evergreen games reaching new highs. The later timing of this year's Spring Festival led to some gaming revenue and revenue sharing being deferred to subsequent quarters. The firm expects domestic gaming revenue to increase by 12% year-on-year in the second quarter, with overseas gaming revenue increasing by 10%. CICC noted that Tencent's advertising revenue growth accelerated in the first quarter, increasing by 20% year-on-year, and expects advertising revenue to grow by 17% year-on-year in the second quarter. The firm estimates that financial services revenue increased by 7% year-on-year in the first quarter, better than previous expectations, due to improvements in commercial payment volume and pricing, as well as steady growth in wealth management; enterprise services revenue increased by 20% year-on-year in the first quarter, benefiting from simultaneous increases in cloud service volume and pricing. The firm predicts that enterprise services revenue will grow by 25% year-on-year in the second quarter, while financial and enterprise services revenue will increase by 10% year-on-year. The report believes that Tencent's investment in AI is proactive and controllable. In late April, Tencent released the open-source preview of Hunyuan 3.0 LLM, balancing practicality and cost-effectiveness, which has been deployed in 131 internal products for collaborative iteration, with the next step being the evolution to larger parameter models. Management believes that WeChat/QQ/WeCom serves as a natural control interface for Agentic AI, and if mini-program code can be transformed into AI Skills in the future, it is expected to build differentiated ecological barriers. Excluding the impact of new AI products, Non-IFRS operating profit increased by 17% year-on-year in the first quarter, indicating robust profitability in core business, which is expected to provide sufficient cash flow support for AI investments. The firm expects Tencent's adjusted operating profit and adjusted net profit to increase by 7% and 9% year-on-year, respectively, in the second quarter ### Related Stocks - [TCTZF.US](https://longbridge.com/en/quote/TCTZF.US.md) - [00700.HK](https://longbridge.com/en/quote/00700.HK.md) - [517770.CN](https://longbridge.com/en/quote/517770.CN.md) - [516620.CN](https://longbridge.com/en/quote/516620.CN.md) - [159507.CN](https://longbridge.com/en/quote/159507.CN.md) - [MCHI.US](https://longbridge.com/en/quote/MCHI.US.md) - [03908.HK](https://longbridge.com/en/quote/03908.HK.md) - [601995.CN](https://longbridge.com/en/quote/601995.CN.md) - [TCEHY.US](https://longbridge.com/en/quote/TCEHY.US.md) - [80700.HK](https://longbridge.com/en/quote/80700.HK.md) - [HTCD.SG](https://longbridge.com/en/quote/HTCD.SG.md) ## Related News & Research - [Microsoft’s Xbox PC app hints at China expansion for Game Pass](https://longbridge.com/en/news/286259312.md) - [Tanwan files HKEX next-day return disclosing share repurchase at HKD 14.52](https://longbridge.com/en/news/286540703.md) - [BluSky AI Inc. 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