Tencent Q1 Report Focuses on Details of 36 Billion AI Expenditure, HY3 Tops Invocation List

Tencent is set to announce its financial results for the first quarter of 2026 on the evening of May 13th. Several brokerages estimate that the revenue will grow by approximately 10% to 11% year-on-year, falling within the range of 197.3 billion to 202.4 billion yuan, with Non-IFRS net profit attributable to the parent company amounting to about 68.3 billion yuan, increasing by around 10% year-on-year.

Revenue expected to break two hundred billion, market more concerned about where the money is spent

In a report on May 6, Jefferies listed the top five focuses for this financial report, with AI expenditure breakdown at the forefront. Tencent had previously stated that AI spending would at least double from 18 billion yuan in 2026 to 36 billion yuan, but did not disclose how much is allocated for training computing power, inference, talent, and marketing respectively.

Both Alphabet and Meta have just raised their capital expenditures. Whether Tencent follows suit, how the money is spent, and how efficiently, will directly affect market pricing.

The other four focuses are: HY3 preview user feedback and the timeline for the trillion-parameter model, progress in AI赋能 various business segments, the competitive situation of WorkBuddy and QClaw, and the overall outlook for capital expenditure.

HY3 tops the global call list, purity to be verified

The HY3 preview, released on April 23rd, has recently attracted some attention. Tencent disclosed on May 7th that the total token call volume within two weeks of going live reached ten times that of the previous generation HY2.

Public data from OpenRouter shows that HY3 preview, with a weekly token call volume of 3.66 trillion, secured the top spot in both the weekly list and market share for the week of April 27th, surpassing Kimi K2.6's 1.8 trillion and Claude Sonnet 4.6's 1.34 trillion. In Tencent's own intelligent applications such as WorkBuddy and CodeBuddy, the call volume increased by more than 16.5 times.

However, data from Jefferies shows that the overall token consumption of Chinese models increased by 81.7% week-on-week during that week, driven mainly by the free promotion of HY3. The head of Tencent's HY3 also admitted frankly that the purpose of the limited free offer is to gather developer feedback to provide direction for the official version iteration.

The key to judging the real competitiveness of this model is whether the call volume can be maintained after the free period ends.

Shunyu Yao's premiere: from reconstruction to submission in three months

The HY3 preview is the first work by Shunyu Yao since joining Tencent from OpenAI. He initiated training at the end of January, and from the reconstruction of infrastructure to model release in less than three months, which is a rare speed among domestic top manufacturers.

The model uses the MoE architecture, with a total of 295B parameters, 21B activated parameters, supporting a context of 256K. The scale was deliberately chosen as a medium size, not pursuing the extreme, but rather finding a balance between performance and inference costs.

Shunyu Yao said on the day of the launch that Tencent wants to make "a practical model that surpasses public lists," and the path is to co-design with multiple products.

After all, the 295B parameters of the preview are just the prologue. Whether the official version can verify the methodology on a larger scale of parameters is the key issue for the next step. After the release of the HY3 preview, Goldman Sachs maintained a buy rating with a target price of 700 Hong Kong dollars.

Games and advertising hold the basic plate, cloud business awaits acceleration

It is estimated that Tencent's value-added service revenue will be about 101.3 billion yuan, increasing by 10% year-on-year. Games are the main force, with domestic games expected to grow by 11% to 38 billion yuan, with contributions from the incremental Delta Action and Fear Agreement mobile games; overseas games are expected to grow by 17% to 47.6 billion yuan, with Supercell and PUBG Mobile continuing their strong performance. In terms of new games, the mobile game of Locke Kingdom broke a hundred million in iOS turnover within 10 days of the public test, and the World of Glory of Honor was launched in April.

Marketing services may be the fastest-growing segment, with an expected year-on-year increase