Citigroup: Raises Tencent's target price to HK$699, expecting stable performance in the second quarter.

Citigroup's report pointed out that Tencent Holdings will announce its second quarter performance for 2025 on August 13, with expected solid performance. It is estimated that the net profit under non-GAAP will increase by 4.9% annually to 60.1 billion yuan. Revenue and profit are expected to meet or exceed the consensus expectations of the bank and the market. The potential for upward trend in the gaming business is due to contributions from new games and deferred revenue. Citigroup expects that in the third quarter of 2025, Tencent's gaming business will maintain stable revenue due to strong seasonal factors, new game releases, and content upgrades. They also expect Tencent to focus on the latest developments and updates on AI models and new features of "ingots", new game pipelines, WeChat search momentum and macro outlook. Citigroup has raised its target price from 695 Hong Kong dollars to 699 Hong Kong dollars, with forecasted price-to-earnings ratios of 24.4 times and 22.3 times for the current and next year, maintaining a "buy" rating and core holding preference.