Tencent (00700.HK) Short-term Analysis: Hovering around HKD 550 ahead of earnings, with the key resistance at HKD 560 being the critical breakout point

$TENCENT (00700.HK)$Tencent (00700.HK) is set to announce its Q4 2025 earnings today (March 18). The stock showed cautious performance ahead of the earnings. As of March 17, 2026, Tencent closed at HKD 550, down 1.52% for the day, with an intraday high of HKD 557 and a turnover of HKD 12.711 billion. On the ADR market, Tencent closed at HKD 542.286, down 1.4% compared to the Hong Kong close. In early trading on March 18, the market sentiment was cautious, with the stock consolidating near HKD 544. Investors are watching whether the earnings results can drive the stock price to break through the HKD 560 resistance.

Technical Analysis

From the chart movement, Tencent's stock price rebounded from the HKD 500 level in early March and has gradually recovered, recently consolidating near HKD 550. Based on technical data as of March 17, Tencent’s first support is around HKD 531 (near the 10-day moving average), with the more critical second support at HKD 501 (early March low). In terms of resistance, the first resistance is at HKD 575, and if broken, the next target would be HKD 599.

In terms of technical indicators, the overall signal is 'Buy,' with a total of 8 buy signals. The RSI stands at 56, and multiple oscillation indicators show buy signals. Meanwhile, the Rate of Change (ROC) indicator shows a strong 'oversold, potentially bottoming, buy' signal, reflecting that conditions for a short-term rebound remain intact. Ichimoku Cloud and MACD both indicate buying, and Bollinger Bands also suggest buying, with overall technical signals leaning positive.

Reviewing the analysis from the [HKEX Podcast] on March 17, the episode pointed out that Tencent's stock price, after rebounding from the HKD 500 level, gradually moved above the 10-day and 20-day moving averages, showing improved short-term momentum but still failing to reclaim the upper mid-term moving average area. Overall, this represents a technical rebound following a decline rather than a confirmed trend reversal. Significant resistance is emerging between HKD 560 and HKD 576, where HKD 560 corresponds to the upper Bollinger Band and also serves as the extension pressure zone of the recent rebound. Above that, the 60-day moving average at HKD 576 and higher mid-term moving averages create layers of resistance. Until breaking through HKD 560 effectively, the rebound structure remains incomplete. For support, short-term focus can be placed on HKD 535 (the 10-day moving average position), followed by HKD 528 (the overlap of the Bollinger middle band and the 20-day moving average), which acts as a key support level; if breached, attention should shift to the psychological support at HKD 500. Overall, the range between HKD 535 and HKD 560 forms the primary short-term trading range.

From a short-term risk-reward perspective, the current stock price sits in the upper-middle part of the range, approaching resistance, with potential room to fall back. Entering now does not offer a compelling risk-reward ratio. An ideal approach would be to consider accumulation closer to the support zone between HKD 535 and HKD 528 or wait for a breakout above HKD 560 before following the upward momentum.

March 17 [Hong Kong Stock Podcast] Hang Seng Index, Geely Auto, JD.com Logistics, Li Ning, Pop Mart, Tencent

Market News Integration

In terms of earnings, Tencent will announce its Q4 2025 results today (March 18). Based on forecasts from 12 brokerages, Tencent's Q4 2025 non-IFRS net profit is expected to range between RMB 61.16 billion and RMB 67.945 billion, representing a year-on-year increase of 10.6% to 22.8%, with the median at RMB 64.4 billion, showing a year-on-year growth of 16.4%. The market is paying attention to Tencent's latest AI strategy, AI budget and capital expenditure, whether AI mini-programs will integrate e-commerce, travel, and local life scenarios, as well as the latest performance of Channels and WeChat AI search.

Regarding AI applications, Tencent has recently seen positive developments. Enterprise WeChat now supports one-click QR code access to OpenClaw. Users can choose 'Quick Setup' in the Tencent Cloud backend and create an intelligent bot instantly by scanning with Enterprise WeChat. Currently, major cloud services, large model vendors, and OpenClaw ecosystem products are gradually coming online to support access via Enterprise WeChat. Tencent announced the integration of the QQ Open Platform into OpenClaw’s AI agent platform, triggering the latest wave of 'lobster' fever among Chinese internet users. This move is expected to quickly educate its user base on using AI agents, allowing Tencent to accumulate user behavior data, which will help develop and evolve systems and platforms within the WeChat ecosystem.

From an institutional perspective, Shenwan Hongyuan Research issued a report stating that Tencent is a core beneficiary of the AI era, leveraging the super ecosystem barriers of high-frequency instant messaging entry points like WeChat/Enterprise WeChat, possessing significant potential for 'late-mover advantage'. They maintain a 'Buy' rating with a target price of HKD 765. JPMorgan believes investors should focus on AI signals that can simultaneously influence market sentiment and fundamentals, including this year's capital expenditure intensity and progress, GPU/AI chip procurement and supply visibility, etc. Summarizing investment ratings and target prices from 16 brokerages, BNP Paribas gives a 'Outperform' rating with a target price of RMB 825, Jefferies 'Buy' at RMB 794, Huatai Securities 'Buy' at RMB 792, Citi 'Buy' at RMB 783, Bank of America Securities 'Buy' at RMB 780, Goldman Sachs 'Buy' at RMB 770, Nomura 'Buy' at RMB 775, JPMorgan 'Overweight' at RMB 750, Morgan Stanley 'Overweight' at RMB 735, and CICC 'Outperform Industry' at RMB 700.

Warrant Product Review

Reviewing warrant products, multiple Tencent-related derivatives mentioned on March 12, 2026, recorded significant performance in the following two trading days (up to March 16). During this period, Tencent's underlying stock rose by 2.20%, while related bullish products fully demonstrated leverage effects: Guotai Junan call warrants (23121) $GJTENCT@EC2607A.C (23121.HK)$ performed the most outstandingly, rising by 19%, UBS bull certificates (59949) $UB#TENCTRC26076.C (59949.HK)$and$BI#TENCTRC2612K.C (62650.HK)$ and BOC bull certificates (62650) both rose by 16%, while BOC call warrants (26418) also increased by 14%.

Warrant Product Recommendations and Comparisons

With Tencent's current share price at the RMB 550 level, combined with support levels at RMB 531 and RMB 501 and resistance levels at RMB 575 and RMB 599, investors can choose suitable products based on their own views.

For bullish strategies, investors may consider Guotai Junan call warrants (23121) and BOC call warrants (26418). Guotai Junan call warrants (23121) $GJTENCT@EC2607A.C (23121.HK)$ have an exercise price of RMB 622.72, providing about 9.6 times leverage. The key advantage of this product lies in its premium and implied volatility being the lowest among similar products, making it suitable for cost-effective bullish strategies. At the current share price, it is approximately 13.2% out-of-the-money, close to the second resistance level of RMB 599, ideal for investors expecting the share price to break through RMB 599. BOC call warrants (26418) have an exercise price of RMB 629.38, offering leverage of about 8.5 times, relatively higher, making it suitable for investors seeking higher leverage. Additionally, BOCI’s Tencent call warrants (25908) $BITENCT@EC2607B.C (25908.HK)$ with an exercise price of RMB 727.49, expiring in July this year, offer actual leverage of 10 times, and are also one of the market's focal choices.

For bull contracts, consider BOC bull contract (58264). $BI#TENCTRC2612O.C (58264.HK)$ Recovery price at 530 yuan, actual leverage of 18 times, relatively higher leverage value; another option is UBS bull contract (56892). $UB#TENCTRC26083.C (56892.HK)$ Recovery price at 527 yuan, actual leverage of 18.3 times, similarly with a relatively high leverage value. When choosing bull contracts, it's important to ensure the recovery price is below support levels of 531 yuan and 501 yuan to provide sufficient safety buffer. The recovery prices of 530 yuan and 527 yuan are slightly below the first support level of 531 yuan, offering acceptable safety margins, making them suitable for investors optimistic about future market performance.

Investors focusing on deploying 'bull contracts with recovery price of 542 yuan betting on earnings results' should exercise particular caution. At the current price of 550 yuan, the 542 bull contract has only about 8 yuan, or approximately 1.5% of buffer space, representing an extremely tight structure. Given that volatility tends to increase around earnings reports, even if the overall market direction is correctly predicted, a temporary dip in stock price to around 540 could trigger recovery risk. This type of deployment is not purely bullish but rather a high-risk short-term gamble, demanding strong risk control measures.

Two selected bullish products:

- Guotai Junan call warrant (23121): Lowest premium and implied volatility, with leverage reaching 9.6 times, making it the most ideal choice in terms of comprehensive terms for bullish deployment.

- UBS bull contract (56892): Actual leverage of 18.3 times, recovery price close to the support level, suitable for aggressive investors looking to capture short-term rebounds.

For bearish deployments, put warrants can be considered such as BOC put warrant (23122) with an exercise price of 499.8 yuan and leverage of 9.3 times. This product has the lowest premium and relatively high leverage, making it suitable for bearish strategies. Another option is the UBS put warrant (21984) with an exercise price of 499.8 yuan and leverage of 8.9 times, also offering relatively high leverage. When selecting put warrants, it’s crucial to note that the exercise price of 499.8 yuan is below the current stock price, classifying it as an out-of-the-money product. If the stock price falls below the 531 yuan support level, these products will perform more optimally. Additionally, the Tencent put warrant (27140) issued by BOCI, with an exercise price of 408.68 yuan expiring in October this year and actual leverage of 6 times, is also one of the bearish options receiving market attention.

For bear contracts, consider UBS bear contract (58047) with a recovery price of 580 yuan and actual leverage of 19 times, offering relatively high leverage value; another option is BOC bear contract (57847) with a recovery price of 585 yuan and actual leverage of 15.7 times, also with relatively high leverage value. When selecting bear contracts, ensure the recovery price is above resistance levels of 575 yuan and 599 yuan. A recovery price of 580 yuan is slightly above the first resistance level of 575 yuan, representing a close-range choice suitable for investors expecting the stock price to face resistance at 575 yuan and fall back. However, caution should be exercised if the stock price breaks through 575 yuan, as there would be recovery risk.

Two selected bearish products:

- BOC put warrant (23122): Lowest premium, leverage up to 9.3 times, making it one of the more ideal choices in terms of bearish deployment parameters.

- UBS bear contract (58047): Actual leverage of 19 times, recovery price close to the resistance level, suitable for aggressive investors with a short-term bearish outlook.

Overall, Tencent's stock price is at a critical juncture ahead of earnings, with the 550-yuan level becoming the market's focus, and the 560-yuan resistance set to determine short-term direction. Fundamentally, positive factors such as the continued deepening of AI applications and widespread institutional optimism are prevalent, but market reactions to earnings remain divided. Investors should strictly control risks when deploying capital, choosing appropriate derivative instruments based on key support levels at 531 yuan and 501 yuan, and resistance levels at 575 yuan and 599 yuan. Additionally, attention should be paid to the recovery risk of near-price bull contracts and the impact of out-of-the-money levels on product performance.

Interactive Question:

Dear readers, how do you think Tencent (00700) will develop after its earnings report?

A) Break through the 560-yuan resistance, further testing 575 yuan or even 599 yuan

B) Consolidate within the range of 535 yuan to 560 yuan

C) Fall below the 535-yuan support, retesting 531 yuan or even 501 yuan

Feel free to share your views in the comment section!

Friendly Reminder: This article does not constitute any investment advice.

This article is for reference only and does not constitute any investment advice. The market data, opinions, and analysis contained herein may change at any time without prior notice. We are not responsible for any loss or damage caused by reliance on the information in this article. Technical analysis only shows whether certain technical conditions are met; a comprehensive assessment of asset performance should combine other data and should not solely rely on this article to make trading decisions. Please note that past performance is not indicative of future results. Follow Jenny's insights on Hong Kong stock warrants for more professional analysis.

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