The bank raised Tencent's revenue and earnings per share forecast for the fiscal years 2025/2026 by 1%, expanding the long-term growth potential of its marketing services.
Zhitong Finance APP has learned that Goldman Sachs released a research report stating that due to the robust performance of game and advertising revenue in the first fiscal quarter, both revenue and profit exceeded expectations. TENCENT's target price has been slightly raised by 0.8% to HKD 595 from HKD 590, maintaining a "Buy" investment rating.
Goldman Sachs pointed out that TENCENT's revenue grew strongly in the first fiscal quarter (up 13% year-on-year) and earnings per share (EPS) rose 25% year-on-year, primarily due to its two premium sources of revenue (games and marketing services), both of which saw year-on-year growth rates reaching or exceeding 20%. The gross margin also hit the highest level since the second fiscal quarter of 2016. The bank has raised its revenue and earnings per share forecasts for TENCENT for the 2025/2026 fiscal year by 1%, expanding the long-term growth space of marketing services. Advertising, E-Commerce, gaming, and cloud computing will be driven by TENCENT's continued execution and investment in AI.
