BlockBeats report: On June 24, Goldman Sachs’ Ronald Keung team released a research report noting that WeChat launched an internal beta test of its built-in AI assistant, “Xiao Wei,” marking the super app’s official entry into the agent space. Current market concerns regarding Tencent center on three points: First, Xiao Wei utilizes WeChat’s proprietary WeLM model rather than Tencent’s HunYuan model, raising concerns about duplicated resource investment due to the coexistence of two large model systems; second, Goldman Sachs’ bottom-up analysis estimates that if fully rolled out, the incremental inference costs could erode Tencent’s adjusted operating profit by 5% to 17% in Q4 2026, with cost pressures potentially emerging before corresponding revenue growth; third, short-term monetization still relies heavily on online advertising, particularly transaction-based ads, requiring deeper integration of Xiao Wei into local life, content discovery, and shopping scenarios—a process that cannot be achieved overnight.
From a functional perspective, Xiao Wei already supports end-to-end execution of WeChat’s native features via voice or text commands—including sending messages, posting to Moments, initiating video calls, using mini-programs to book appointments or order food—along with multimodal content generation and information retrieval, and even generating mini-program prototypes through natural language descriptions. Goldman Sachs believes Tencent’s current valuation has already partially reflected pessimistic expectations regarding its AI progress, and the Xiao Wei beta test represents a crucial step in its AI roadmap. Key metrics to watch over the next several quarters for potential multiple expansion include: whether the foundational model can transition from a follower to a leader, whether ad growth can re-accelerate, whether Tencent Cloud can solidify its position among China’s top three hyperscale cloud providers, and the adoption progress of WeChat’s AI assistant and enterprise productivity tools. Goldman Sachs maintains a 12-month target price of HK$700 for Tencent, representing approximately 61.7% upside from the current price of HK$433.