According to a JPMorgan research report, Tencent (00700.HK) delivered strong third-quarter results, with revenue and adjusted earnings per share exceeding market expectations by 2% and 7%, respectively. Adjusted operating profit and net profit both increased by 18% year-on-year, outpacing revenue growth by 3 percentage points.
On the other hand, capital expenditure during the period fell by 32% quarter-on-quarter to RMB 13 billion, a key point that management will need to address. The stock is expected to react positively in the short term, with the report maintaining a target price of HKD 685 and an 'Overweight' rating.
