Goldman Sachs raised Tencent’s target price to HK$431, with Buy rating

 

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Tencent posted largely in-line second quarter results with robust performance from its advertising business, with the 34% year-on-year growth in advertising operations offsetting the weaker-than-anticipated domestic game business, Goldman Sachs said in a note. 

While the weakness in the domestic game sector will temporarily persist, the growth in game business should quicken in the third quarter as the e-sports games enter quarters of intensive commercialization, it said.

As for fintech and commercial services, the company is expected to see steady commercial payment volume growth, however, the competition in the cloud-computing segment will likely become increasingly ferocious, Goldman said. 

The broker raised Tencent’s target price to HK$431, rated at Buy.