Tencent shares climbed as much as 7.8% on Tuesday before closing approximately 5% higher at HK$458.4, extending a 2.6% gain from Monday. The rally followed the launch of Hy-Image-3.5-Preview, an image-generation platform offering text-to-image conversion, image-to-image transformation, multi-turn conversational editing, multiple input formats and output resolutions of up to 4K. Tencent said internal testing, including blind evaluations by hundreds of professional designers, showed a 30% improvement over previous versions. The model was assessed as roughly on par with ByteDance's Seedream 5.0 Pro and marginally ahead of Google's Nano Banana Pro and Alibaba's Qwen-Image-3.0 Pro. The release is part of Tencent's broader effort to deploy its Hunyuan models across products such as the Yuanbao AI assistant and WorkBuddy, while a recent appointment of former OpenAI researcher Yao Shunyu as chief AI scientist strengthens its research leadership. Daiwa analysts said Tencent has several potential AI revenue channels despite higher investment needs, including applications in gaming, advertising and workplace productivity. Alibaba separately said at its Apsara Conference that it plans to develop a model with 5 trillion to 10 trillion parameters and unveiled proprietary AI semiconductor technology. Alibaba shares gained 1.95%, while the Hang Seng Index rose 0.3% and the Hang Seng Tech Index advanced 0.5%.