买入：GIS 2026峰会巡演关键要点

EquitiesInternet Software & Services Buy:GIS 2026 tour key takeaways China ◆Key focus on AI strategy, monetisation and chip strategy◆Core business fundamentals still solid◆Maintain Buy and TP at HKD750.00 MAINTAIN BUY TARGET PRICE(HKD)PREVIOUS TARGET(HKD)750.00750.00 We hostedJane Yip (Senior Director of IR Department) and PH Cheung (Director ofIR Department)fortheHSBC Global Investment Summit 2026 (GIS) tour on8April. Key investor questions centered around AI development:1)AI strategy: Tencent is developingagentic AI features in Weixin but the launch timeline is yet tobe confirmed.Current models in the market, including SOTA models globally, cannotsupport thecomplex execution ofagentic AI functions inWeixin, so Tencent is workingon solutions. HY 3.0 will improve in multiple areas including inferencing, long memory,long context, multi-turn questioning and agentic capabilities, and it will be launched inApril. Themodel is viewed as one of the many key steps forward on a long journey ofmodel upgrades.Tencent starteditsinvestmentin AIseveral years ago, but steppedup investments in recent yearsand marginscould seeanimpact from higher spendingon talent, marketing, and bandwidth & server costs. 2)AI monetisation: Apart fromads, games benefits from content production (e.g., AI-powered skinning technologywhich creates more attractive skins at a faster pace, benefitting paying ratio andARPU), and user engagement (e.g., AI teammates in PvP games and NPC in PvEgames, which increase gamer retention).Tencent’sCloudbusinesswill benefit fromAI demand:i) GPU compute offered to external clients and adjacent solutions likedata storage; ii) subscription revenue from autonomous agentic AI solutions such asWorkBuddy, which sees paying propensity from prosumers; iii) customised agentic AIdeployment for enterprises (e.g., Tencent Agent Development Platform).3)Chipstrategy: Tencent sources chips from multiple vendors and collaborates withdomestic chip makers to customise chips to improve yield for inferencing ofbusinesses such as games and long video. It continues to buy and lease computingpower and will adjust the mix of the twosubject to chip availability. Charlene Liu*Head of Internet and Gaming Research, Asia PacificThe Hongkong and Shanghai Banking CorporationLimited, Singapore Branchcharlene.r.liu@hsbc.com.sg+65 6658 0615 1Q26 preview:Tencent will report 1Q results on 13 May. We expect revenue andnon-IFRS OP to grow 11%/7% y-o-y, respectively.By segment (1Q y-o-y growth):1) Domestic Games(+9%):Honor of Kings (HoK): World was launched on 10 Aprwitharelativelylight marketing effort. LeveragingHoK’s IP appeal, we expectgrossing to ramp up gradually. Roco Kingdom: World, released on 26 March,was offto a strong start.2)International Games(+14%)faces tough comps this year andcould see morepronouncedgrowthdecelerationin comingquarters.3)MarketingServices(+19%):This is driven byhigher conversions, more collaboration witheCommerce players and ad inventory in Video Accounts.4)Fintechand BusinessServices (+9% yoy),driven by AI demand and favourable pricingfor cloud. Ritchie Sun*, CFAAnalyst, Internet ResearchThe Hongkong and Shanghai Banking Corporation Limitedritchie.k.h.sun@hsbc.com.hk+852 2822 4392 * Employed by a non-US affiliate of HSBC Securities (USA) Inc, and isnot registered/ qualified pursuant to FINRA regulations HSBC Global Investment Summit Shareholder return:Asthetop priority is agentic AI and model development, weexpect Tencent to take a holistic approach in capital allocation, by payingacashdividend while maintaining buybacks, butthelatterarea lower priority due to the highreturn opportunities from AI investment. 14 to 16 April 2026 Find out more Issuer of report:The Hongkong and ShanghaiBanking Corporation Limited, Singapore Branch Disclosures & DisclaimerThis report must be read with the disclosures and the analystcertifications in the Disclosure appendix, and with the Disclaimer, which forms part of it. View HSBC Global Investment Research at:https://www.research.hsbc.com Financials & valuation:Tencent Holdings AItracking On 18 February 2026,Yuanbaoannounced its DAUexceeded50m and MAUreached114m Games tracking Exhibit5: Popularity ranking of Tencent’skey PC titles in China remain stable Exhibit6: Delta Force PC ranks #2inpopularity ranking in web cafes inChina 1Q26 preview Shareholder returns Risksto our view Valuation Downside risks: ◆Inability to get monetisation approval for games◆Regulatory headwinds for games and internetfinance◆Adeeper macro slowdown that could affectadvertisers’ budgets◆Inappropriate advertising and video content◆Changes in user preferences in terms ofentertainment formats or communications◆Overhang from major shareholders’ reduction ofstake over time◆Being included in lists of overseas regulators thatcan affect operations or even trading/ownership ofthe stock. Disclosure appendix Analyst Certification Thefollowing analyst(s), economist(s), or strategist(s) w