CICC: Raise Tencent's target price to HK$700 and maintain "Outperform Industry" rating.

CICC has released a research report stating that Tencent Holdings' second quarter revenue increased by 14.5% year-on-year to 184.5 billion yuan, exceeding the bank's and market expectations by 3.5% and 3.1% respectively. Due to rapid growth in various businesses, CICC has raised Tencent's revenue for 2025 and 2026 by 2% and 4% to 745.3 billion and 815.8 billion yuan, respectively, while maintaining the net profit forecast for 2025 and 2026 under non-International Financial Reporting Standards unchanged. The bank maintains its "outperform industry" rating, raising the target price by 17% to 700 Hong Kong dollars due to the upward shift in market valuation center, and switching the valuation to 2026 based on the AI's longer-term empowering prospects, corresponding to a 20 times Non-IFRS P/E ratio for 2026.