Japan 20-year government bond yield fell 6 bps to 3.71%.

Nomura cut its target price on Tencent (00700.HK) to HK$659, citing profit pressure from continued AI investment. It said Tencent’s Q3 revenue was roughly in line, up 9% YoY, but non-IFRS operating profit fell 3% YoY to 70.3 bln yuan, about 2% below market expectations. Non-IFRS operating margin slid 4.1ppt YoY to 33.5%. Capital expenditure rose to 58.7 bln yuan, up 11% QoQ and 352% YoY. Nomura trimmed FY2026 and FY2027 non-IFRS EPS forecasts by 2% and 3% respectively to reflect margin strain from AI spending and slightly slower games growth. Rating stays Buy; new PT implies 19x FY2027 PE versus the stock trading at c.12x FY2027f PE.

Haitong International cut its target price for Tencent Holdings (00700.HK) 2% to HK$470 and kept an Outperform rating. It forecasts Q3 revenue of RMB210.2bn, up 9% YoY, and adjusted operating profit of RMB68.8bn, down 5% YoY, attributing the decline to AI-related depreciation and product investment recorded in cost of revenue and opex. Haitong projects 2026 revenue of RMB823.3bn (+10% YoY) and adjusted net profit of RMB265.5bn (+2% YoY). The broker said AI remains Tencent’s strategic investment priority; near-term depreciation will weigh on results but management is expected to deploy capital with discipline rather than automatically accelerating quarterly spend. The PT cut reflects reduced EPS forecasts.