STOCKS | Nomura Cuts Tencent FY2026 and FY2027 Earnings Forecasts, Keeps HK$727 Target

Nomura cut its earnings forecasts for Tencent Holdings for fiscal years 2026 and 2027, while keeping its target price unchanged at HK$727. According to Jin10, Nomura lowered its non-IFRS net profit forecasts for Tencent by 2% for FY2026 and by 1% for FY2027, citing potential margin pressure from continued increases in AI investment. The bank maintained a “buy” rating. Nomura said Tencent has made positive progress in AI in recent months, including the early July launch of the officially released Hunyuan 3.0 version, which it said has been widely recognized by the market. It also said Tencent’s desktop AI assistant WorkBuddy has become one of the most popular PC AI agents in mainland China. Nomura said Tencent has the ability to narrow the gap with current AI-leading companies. However, it added that competitors such as Alibaba and ByteDance have also launched similar PC AI agent products, and that user switching costs and willingness to pay are both relatively low. Nomura expects market competition to remain intense in the short term.