Goldman Sachs Maintains Tencent's 12-Month Target Price at HKD 700, Indicating Approximately 61.7% U

On June 24, Goldman Sachs' Ronald Keung team released a research report indicating that WeChat launched an internal test of its built-in AI assistant 'Xiao Wei' last weekend, marking the official entry of this super app into the intelligent agent arena. Currently, market concerns regarding Tencent focus on three points: first, Xiao Wei uses WeChat's self-developed WeLM model instead of Tencent's mixed Yuan model, raising worries about resource duplication due to the parallel operation of two large model systems; second, Goldman Sachs estimates that if fully promoted, the incremental inference costs could erode Tencent's adjusted operating profit by about 5% to 17% in Q4 2026, with cost pressures likely to manifest first when revenue growth is limited; third, short-term monetization still relies on online advertising, particularly transaction scenario ads, and it will take time for Xiao Wei to deeply penetrate local life, content discovery, and shopping scenarios, making immediate success unlikely. From a functional perspective, Xiao Wei already supports voice or text commands to complete the full chain of WeChat's native functions (sending messages, posting on Moments, making video calls, booking appointments through mini-programs, and ordering takeout), supports multimodal content generation and information retrieval, and can even generate mini-program prototypes through natural language descriptions. Goldman Sachs believes that Tencent's current valuation partially reflects pessimistic expectations regarding AI progress, and the internal testing of Xiao Wei is an important step in its AI roadmap. Key observation dimensions for valuation multiple recovery in the coming quarters include: whether the foundational model can shift from being a follower to an active player, whether advertising growth can accelerate again, whether Tencent Cloud can solidify its position as one of the top three large-scale cloud service providers in China, and the adoption progress of the WeChat AI assistant and enterprise productivity tools. Goldman Sachs maintains Tencent's 12-month target price at HKD 700, indicating approximately 61.7% upside potential from the current HKD 433.