DBS: Maintains "buy" rating for TENCENT (00700) with target price lowered to 537 Hong Kong dollars.

DBS released a research report stating that it maintains a "buy" rating for TENCENT (00700) and slightly lowers the company's target price from HKD 543 to HKD 537 due to its bright earnings outlook and shareholder-friendly return policy. The report notes that Tencent's online games and online advertising are the main drivers of revenue, with a compound annual growth rate expected to be 8% and 15% from 2023 to 2026. The bank expects the monetization of Tencent's video business to accelerate and has adjusted its earnings forecast for the company from 2021 to 2026 by 9% to reflect ongoing improvements in operating efficiency, with expected year-over-year adjusted earnings growth of 36%, 11%, and 10% during this period.