Analysts at Globlex Securities have issued a BUY recommendation for the TENCENT80 Depositary Receipt (DR) issued by KTB, labeling the technology conglomerate as China’s “King of AI”. With a 12-month target price of THB 33.00, investors are looking at a potential upside of 50.0% from the current share price of THB 22.00.
A Strategic Pivot to High-Quality Growth
The investment thesis for Tencent has undergone a significant shift toward a “high-quality growth” model. This strategy is anchored by the integration of Artificial Intelligence (AI) across its vast ecosystem, ranging from gaming and fintech to digital content. The company’s focus has moved toward efficiency improvements and a strategic pivot in its investment portfolio, targeting high-growth startups that complement its core business.
Evidence of this successful execution is already appearing in the company’s financials. In the third quarter of 2025, marketing services revenue surged by 21% year-on-year, driven by smarter algorithms and higher ad conversion rates. Meanwhile, the gaming division saw a 16% jump in value-added services, bolstered by the performance of domestic titles like Delta Force and Valorant Mobile.
AI Efficiency Boosting the Bottom Line
Tencent’s investment in its HunYuan AI foundation model and the Yuanbao AI assistant is beginning to yield tangible returns. By streamlining internal processes such as production and coding, AI is driving high operational leverage. This was evident when the 3Q25 net profit reached RMB 70.6 billion—an 18% year-on-year increase that outpaced revenue growth.
Resilience Amid Macroeconomic Headwinds
While China’s broader economy faced challenges in late 2025, with GDP growth sputtering at just 1%, Tencent has emerged as a notable outlier. Analysts point to the company’s ability to thrive despite these headwinds as a testament to its resilient, well-capitalized digital platform.
Looking forward, Tencent is expected to maintain a net profit CAGR of 23% through 2028. Beyond domestic growth, the company is making long-term bets on global expansion, particularly in global cloud infrastructure within the Middle East. For investors, the execution of China’s consumption-driven policies remains a powerful upcoming catalyst that could further propel Tencent’s digital advertising and value-added services.
