Tencent's Shares Remain Highly Undervalued

Dow Jones09-28

0313 GMT - Tencent's shares are still very undervalued, Morningstar analyst Ivan Su says in a research note. Tencent's shares have gained some momentum recently after Meta's artificial-intelligence agent app Muse gained traction, the analyst says. Investors have viewed Muse's popularity as a positive sign for Tencent, which is testing a similar AI agent, Xiaowei, within WeChat, Su says. He thinks Xiaowei has a structural advantage over Muse as it sits within WeChat, China's most-used app, while Muse is a standalone download. Still, Tencent's shares are at roughly a 40% discount to Morningstar's 780 Hong Kong dollar target price. "A successful AI agent launch, likely later this year, could be a catalyst for the shares," he adds. Shares are last at HK$442.00.

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