Guotai Haotong Securities: Maintain "Increase Holdings" Rating for Greentownplay, Expecting High Growth in 2025 Annual Profit Forecast

Guotai Haitong Securities has issued a research report maintaining a “Buy” rating for Tencent (09890). The firm expects the company’s EPS to be 2.94 yuan, 2.26 yuan, and 2.80 yuan for 2025-2027, respectively. Considering the company’s abundant new game reserves in 2026 and the potential for revenue to return to high growth, along with significant improvements in operational and marketing efficiency driven by AI and other new technologies, a 12x forward PE multiple is applied for 2026. Using the exchange rate of RMB:HKD=1:1.14, the target price is HKD 30.92.

Guotai Haitong Securities’ main points are as follows:

Full-year net profit in 2025 is expected to be no less than RMB 1.5 billion, a significant year-over-year increase

The company issued a positive profit forecast, expecting net profit for 2025 to be at least RMB 1.5 billion, a substantial increase from RMB 44 million in the same period of 2024. The main reasons for growth include: 1) Significant gains from fair value changes in financial assets related to holdings of other listed companies; 2) Increased revenue from overseas game publishing, which has a high operating profit margin; 3) Reduced sales and distribution expenses, lowering marketing costs and boosting game business profits, driven by AI technology application, optimized marketing models, some reserved games not yet widely promoted, and some products reaching maturity with lower customer acquisition costs due to brand effects.

Successfully issued HKD 468 million convertible bonds to accelerate AI + gaming strategy

On December 18, 2025, the company announced the issuance of HKD 468 million zero-coupon convertible bonds. The funds will be dedicated to strategic investments in AI-related industries. Currently, the company has built a comprehensive AI technology system covering issuance, operations, and R&D, including the自主研发“河图” data intelligence analysis system, “洛书” omnichannel media management system, and the upgraded “X智慧平台” integrating AI technology. The firm believes AI technology, in the form of intelligent agents, has deeply penetrated all aspects of the company’s operations—from AIGC content generation to AI maintenance and marketing algorithm optimization—potentially empowering core growth.

Rich new game reserves, 2026 expected to be a product year

After years of exploration, the company has developed a product matrix covering multiple IPs such as Legend, Miracle, and Hot Blood Jianghu. In 2026, the company’s new product pipeline is abundant, including key titles like King’s Legend 2, New Moon Continent, Code: HD, Soul Land: Evil Slayer Legend, and Tian Long Ba Bu 2: Flying Dragon in the Sky, which are expected to drive future performance growth.

Risk warnings

Delays in new game launches, AI application technology development falling short of expectations

(Author: Wang Zhiqiang HF013)

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