On Wednesday, Jefferies maintained a Buy rating on Tencent Holdings (700:HK) (OTC: OTC:TCEHY) and slightly increased the share price target to HK$453.00 from the previous HK$452.00. This adjustment follows Tencent's announcement of its fourth-quarter results for 2023 and updates on its share repurchase and dividend plans.
Tencent's recent financial disclosures have prompted Jefferies to maintain an optimistic outlook for the company's performance. The firm anticipates improvements in Tencent's online gaming sector starting in the second quarter of 2024, with particular enthusiasm for the upcoming launch of the new game DnF Mobile.
The analysis also highlighted the potential growth in Tencent's advertising segment, where artificial intelligence is expected to play a significant role. Enhanced targeting technology is seen as a key driver, despite the presence of broader macroeconomic uncertainties that could impact the sector.
In addition to gaming and advertising, live streaming e-commerce is identified as an area with substantial growth potential, albeit still in the nascent stages. Jefferies suggests that this segment could become a significant contributor to Tencent's future revenue streams.
Moreover, Jefferies remains confident in the trajectory of Tencent's fintech and business services. These sectors are considered to be on track, aligning with the company's strategic goals and contributing to the decision to maintain a Buy rating on the stock.
The slight share price target increase and continued Buy rating reflect Jefferies' positive outlook on Tencent Holdings, underpinned by strategic initiatives and anticipated developments across multiple segments of the business.
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