UBS Group raised its earnings per share forecast for TENCENT for the fiscal years 2025-2027 by 1-2%, which is higher than the market consensus.
According to the Zhituo Finance APP, UBS Group released a Research Report stating that it has raised the Target Price for TENCENT (00700) from 700 Hong Kong dollars, an increase of 1.4% to 710 Hong Kong dollars, maintaining a "Buy" investment rating. UBS indicated that TENCENT's performance in the first fiscal quarter was better than expected, and the firm raised TENCENT's earnings per share forecast for the fiscal years 2025-2027 by 1-2%, higher than the market consensus.
During the Earnings Conference, the management repeatedly used the term "long runway" to refer to the monetization of various business lines including Online Games, advertising, E-Commerce, and AI, and clearly outlined short-term and long-term drivers. Despite the market consensus on TENCENT's valuation being higher than peers (with a projected PE of 17 times for 2025, and a compound annual growth rate of 16% for earnings per share from 2024-2026), and TENCENT having unique high profitability visibility, the firm believes that it will still face growth limits in the future.
