Guohai Overseas released a Q3 2026 data tracking note on Tencent, highlighting resilient domestic game grossing, advertising growth of 19-20% yoy, and progress on AI initiatives including the Hunyuan model and WeChat 'Xiaowei' assistant. The broker expects Q3 revenue +9% yoy but adjusted net profit -3% yoy due to front-loaded AI investment, with a potential single-quarter profit decline in H2.
Guohai remains Neutral on Tencent, seeing resilient games and ads offset by AI-driven margin pressure, with valuation near trough levels.
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