Tencent's 3Q earnings could miss market consensus due to higher artificial-intelligence-related expenditure, Citi analysts say in a research note.
Citi expects Tencent's 3Q revenue to rise 8.3% to 208.9 billion yuan and adjusted net profit to fall 9.2% to 64 billion yuan, both lower than consensus estimates. While growth likely remained resilient at its core business segments, continuing macro headwinds are expected to weigh on online advertising and fintech revenue, alongside a high base effect for games, they say.
However, its cloud revenue growth could further accelerate, driven by enterprise demand and initial contributions from WorkBuddy, they note. Citi maintains its buy rating on Tencent but cuts its target price to 755.00 Hong Kong dollars from HK$765.00.
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