Goldman Sachs has issued a research report maintaining its "Buy" rating on Tencent Holdings (00700) with a target price of HK$700. Although the company's full-year profit growth is expected to slow this year, the firm continues to forecast a 10% year-on-year increase in adjusted operating profit for the first quarter and an 8% rise for the full year. Tencent has released the open-source Hy3 preview language model, marking the first concrete achievement following the reorganization of its AI strategy. The model's metrics and emphasis on agent functionality are largely in line with expectations. Developed under the leadership of Chief AI Scientist Yao Shunyu, a former researcher at OpenAI, the model has 295 billion parameters, with 21 billion activated parameters. While smaller in scale compared to peers, it focuses on practicality, agent functions, complex reasoning, and coding capabilities. Goldman Sachs views the release of Hy3 preview as a key milestone after the comprehensive restructuring of the Hunyuan team, following last week's launch of HY-World 2.0 3D model. The official version of Hy3 and larger parameter models are expected to be rolled out successively.
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