HK Stock Market Move | Tencent (00700) fell over 4% during trading, with institutions indicating that the market is concerned about the impact of large capital expenditures on EPS.

Tencent (00700) fell more than 4% during trading; as of the time of writing, it is down 3.76% at HK$439.8, with a trading volume of HK$9.602 billion. In terms of news, Tencent's financial report shows that its revenue for the second quarter reached RMB 204.785 billion, a year-on-year increase of 11%, surpassing RMB 200 billion for the first time; however, capital expenditures reached RMB 52.784 billion, up 176% year-on-year, and 65% quarter-on-quarter, far exceeding the market expectation of RMB 32.1 billion; free cash flow recorded a negative RMB 13.8 billion. Roughly calculated, the company's capital expenditure in the second quarter is nearly three times the RMB 19.1 billion from the same period last year, and the total for the first half of the year is RMB 84.72 billion, already exceeding the full-year target for 2025 of RMB 79.2 billion. China Securities Co., Ltd. released a research report stating that the market is concerned about the impact of large capital expenditures on EPS, but the firm believes: the management mentioned that capital expenditures are concentrated in 2026-2027, that training computing power is a fixed cost, and that inference computing power will be dynamically allocated based on return conditions, which ensures both the lower limit of ROI and the upper limit of the investment period for large capital expenditures; they are optimistic about Workbuddy capturing the domestic AI office segment, with recent rapid growth in user numbers, and believe that its user and data advantages are expected to enhance Hys foundational model capabilities; additionally, they look forward to the public beta of WeChat Agent.