HK Stock Market Move | TENCENT(00700) Falls Over 2%; CLSA Says Third-Quarter Profit May Be Weighed Down by Accelerated AI Investment

TENCENT(00700) pulled back over 2%, down 2.18% as of press time to HK$421, with turnover of HK$7.371 billion. On the news front, CLSA's latest research report noted that TENCENT is accelerating the advancement of AI applications, with WorkBuddy and Xiaowei expected to become leading enterprise and consumer-facing agents and new growth drivers; however, third-quarter profit may be weighed down by accelerated AI investment, particularly model training and WorkBuddy penetration. On the results front, CLSA expects TENCENT's third-quarter total revenue to rise 9.4% year-on-year to RMB211 billion, supported by solid gaming and advertising businesses and accelerated cloud growth; adjusted EBIT is expected to fall 2% year-on-year to RMB71.3 billion. The brokerage cut its 2026/27 adjusted net profit forecasts for TENCENT by 3%/7% and lowered its target price from HK$740 to HK$685, maintaining a "High Conviction Outperform" rating.