业绩符合预期：营收略低于预期

Quick Note Tencent reporteda9%y-y increase in1Q26revenuetoCNY196bn,1.5%below Bloomberg consensus and ourestimate.Its non-IFRS operating profit margin (OPM)remainedflat y-yat38.5%,1.0ppabovetheconsensus estimate, supported byexpansionof gross margin (0.8pp y-y) to 56.6%, offsetting higher marketing expenses that grew 44%y-y. Its non-IFRS operating profit (OP) rose 9% y-y to CNY75.6bn - excluding theinvestments in the new Al products (e.g.Hunyuan LLM,Yuanbao and Al agents,etc),itsOPwould have grownat a muchfaster17%y-yto CNY84bn,accordingtomanagement,with the consensus estimate.Tencent's online gaming revenue rose 8% y-y in 1Q26, 4% below the consensus of 12% y-y, ChinaInternet&NewMedia Jialong Shi- NIHK Jialong.shi@nomura.com+852 22521409Rachel Guo-NIHK rachel.guo@nomura.com+85222521400 supported by 6%/13% y-y rise in domestic/overseas gaming revenue, respectively.Thegrowth of domestic gaming revenue was impacted negatively by the late start to the 2026Chinese New Year, which resulted in a portion of the domestic gaming revenue beingaccounted into the subsequent quarter.Tencent disclosed that the cash revenue of itsdomestic gaming business posted an impressive"teens"percent growth in 1Q26,whichmight help its domestic gaming business to accelerate in 2Q, in our view. The ad revenue rose 20% y-y, which was largely in line with our estimate. The solid adrevenuegrowthwasmainlydrivenbydeepened collaborationwith ecommerceplatformsand increased inventory in Video Accounts.Tencent also mentioned its automated adcampaign solution, AiM+, powered ~30% of total marketing services spending fromadvertisers in 1Q. Tencent's Fintech and Business Service revenue rose 9% y-y, which was in line withNomura estimate. Its cloud and business service revenue was up 20% y-y in 1Q,mainlydriven by increased demand anda betterpricingenvironmentfor cloud services,andfeescollectedonMiniShopstransactions.Itsfintechservicemaintainedgrowthtrendbackedby improved consumption activity.Commercial payment volumes grew at a faster ratethan during 4Q25, driven by an increase in the number of transactions and higher valueper transaction in categories such as retail and dining services. 16% y-y/63% q-q,andwas 46% above our projected CNY22bn.Management indicatedduring the conference call that the company's capex is expected to continue growing,especially in 2H this year, as more China-designed chips become available. Please referto Figs 1-2 for a detailed review of the 1Q26 results. Valuation methodology We maintain our Buy rating and SOTP-based TP of HKD727.Our TP implies of 21xFY26F P/E (non-IFRS EPS: CNY30.44).The stock is currently trading at 13.5x FY26FP/E. Production Complete: 2026-05-13 18:15 UTC Appendix A-1 See Disclaimers for Nomura Group entity details. Analyst Certification any or all of the subject securities or issuers referred to in this Research report, (2) no part of our compensation was, is or will be directly orindirectly related to the specific recommendations or views expressed in this Research report and (3) no part of our compensation is tied to anyspecific investment banking transactions performed by Nomura Securities International, Inc., Nomura International plc or any other NomuraGroup company. IssuerSpecificRegulatoryDisclosures The terms "Nomura" and "Nomura Group" used herein refer to Nomura Holdings, Inc. and its affliates and subsidiaries, including NomuraSecurities International, Inc. (NSI") and Instinet, LLC (ILLC'), U. S. registered broker dealers and members of SIPC. A10 The Nomura Group is a registered market maker in the securities / related derivatives of the issuer. Valuation Methodology We value Tencent's online gaming business at USD283bn (FY26F P/E of 18x), online advertisingUSD39bn (FY26F P/S of 5x). We value investees at USD118bn. The resulting TP is HKD727.The benchmark for the stock isthe Hang Seng Index. Risks that may impede the achievement of the target price Risks: High market expectations, aggressive spending on Important Disclosures Online availability of research and conflict-of-interest disclosures Nomura Group research is available on www.nomuranow.com/research, Bloomberg, Capital IQ, Factset, LSEG.Important disclosures may be read at http://go.nomuranow.com/research/m/Disclosures or requested from Nomura Securities International, Inc.If you have any difficulties with the website, please email grpsupport@nomura.com for help. portion of which is generated by Investment Banking activities. Unless otherwise noted, the non-US analysts listed at the front of this report are the Commodities Futures Trading Commission and the National Futures Association (NFA)as swap dealers. NGFP, NDPl, and NIplc aregenerally engaged in the trading of swaps and other derivative products, any of which may be the subject of this report. Distributionofratings (Nomura Group) 57% have been assigned a Buy rating which, for purposes of mandatory disclosures, are classified as a Buy rating; 34% of