Morningstar analyst Ivan Su has highlighted the potential long-term growth benefits for Tencent's (TCEHY, Financial) WeChat following its integration with DeepSeek. Su's research indicates that this move underscores Tencent's focus on enhancing functionality and user experience over exclusivity. While the integration may not immediately impact earnings, it is expected to strengthen WeChat's role in the daily lives of its 1.3 billion users, reinforcing its intangible asset moat. This strategic move is anticipated to drive long-term monetization through increased usage.
Despite a recent rebound, Tencent's stock price still trades at approximately a 30% discount to Morningstar's fair value estimate of HKD 704.00. Currently, Tencent's shares have risen by 3.3%, reaching HKD 510.00.