Investment Rating - The report maintains a "Buy" rating for Tencent Holdings (0700.HK) with a target price range of 453.08 to 503.42 HKD, while the current price is 371.80 HKD [1]. Core Insights - The report emphasizes the increasing importance of shareholder returns, highlighting Tencent's rising cash dividend ratio and record share buyback amounts over the past two years. It aims to explore the financial improvements resulting from this focus on shareholder returns [1][29]. - The anticipated shareholder return for 2024 is projected to be between 3.2% and 4.1% after tax, based on cash dividends and share buybacks [6][51]. Summary by Sections Shareholder Returns - Tencent's shareholder returns are divided into cash dividends and share buybacks, with the cash dividend rate significantly increasing from 10.7% in 2021 to 18.5% in 2023. The company plans to double its buyback amount to over 100 billion HKD in 2024 [1][29]. - The report predicts that the growth rate of earnings per share (EPS) will outpace net profit growth due to high-margin new businesses and operational leverage [1][43]. Financial Performance Forecast - The company is expected to achieve revenues of 670.6 billion HKD, 732.9 billion HKD, and 792.9 billion HKD for the years 2024, 2025, and 2026, respectively, with year-over-year growth rates of 10%, 9%, and 8% [2]. - The projected net profit for 2024 is 210.1 billion HKD, reflecting a year-over-year increase of 49.1% [2]. Cash Flow and Investment Strategy - The report discusses the stability of Tencent's cash flow, which is expected to remain better than reported profits due to a favorable competitive environment and reduced external investments. The cash flow allocated to shareholder returns is anticipated to increase significantly [29][94]. - The report notes a structural change in the use of free cash flow, with a significant decrease in external investments since 2022, allowing for greater shareholder return expenditures [29][94]. Valuation Discussion - The report reviews Tencent's historical valuation cycles and suggests that the current market conditions may lead to a new valuation paradigm, with a focus on EPS growth as a key metric [1][85]. - The anticipated buyback amount for 2024 is estimated at 1,000 billion HKD under a neutral scenario and 1,323 billion HKD under an optimistic scenario, which is expected to further enhance EPS growth [62][89].

李京霖 Jinglin.li@firstshanghai.com.hk + 852 25321962 行业 市值 总股本 52 周高/低 每股账面值 股价表现 2024 年 7 月 16 日 星期二 腾讯《地下城与勇士：起源》登顶 6 月全球手游畅销榜 根据 Sensor Tower 商店情报平台显示，《地下城与勇士：起源》位居 6 月全球手游 畅销榜第一，《王者荣耀》、《和平精英》、《金铲铲之战》位居二三四名。 由腾讯发行的《地下城与勇士：起源》自 5 月 21 日正式公测后，连续 38 天位居国 内 iPhone 总榜和手游畅销榜的双榜首。截至 7 月 10 日，其在中国 iOS 市场的收入 已超 4 亿美元，同时登顶 6 月全球手游畅销榜，终结了过去 7 个月《MONOPOLY GO!》 对该榜单的垄断。 2024 年 6 月共 37 个中国厂商入围全球手游发行商收入榜 TOP100，合计收入 19.2 亿美元，占本期全球 TOP100 手游发行商收入 37%，腾讯蝉联第一。 腾讯首款开放世界赛车手游《极品飞车：集结》7 月 11 日公测 2024 年微信小游戏开发者大会将于 7 月 16 日在北京举办 ...

Investment Rating - The report maintains a "Buy" rating for Tencent Holdings with a target price of 462 HKD for 2024 [24][11]. Core Insights - The report highlights that Tencent's gaming and advertising sectors are expected to grow well, leading to continuous improvement in profitability. The anticipated revenue for FY24Q2 is 160.4 billion RMB, representing a year-on-year growth of 7.5% [28][23]. - The gaming business is recovering, with projected revenue of 46.5 billion RMB for FY24Q2, a year-on-year increase of 4.6%. Domestic game revenue is expected to be 33.1 billion RMB, while overseas game revenue is projected at 13.5 billion RMB [12][28]. - The advertising sector is expected to see significant growth, with network advertising revenue projected to reach 30.8 billion RMB in FY24Q2, a year-on-year increase of 23% [13][28]. Summary by Sections Financial Forecasts and Valuation - Adjusted revenue forecasts for FY2024 and FY2025 are set at 654.3 billion RMB and 703.7 billion RMB, respectively, with year-on-year growth rates of 7.4% and 7.5%. Adjusted net profit for FY2024 and FY2025 is projected at 197.2 billion RMB and 222.5 billion RMB, reflecting year-on-year growth of 25.0% and 12.9% [11][8]. - The gross profit margin for FY24Q2 is expected to reach 52.9%, slightly up from the previous quarter, primarily due to improvements in the advertising business [7][11]. Gaming Business - The gaming segment is anticipated to recover, with revenue expected to be 46.5 billion RMB in FY24Q2, a 4.6% increase year-on-year. Notable titles include the new game "DNF Mobile," which has already generated over 400 million USD in revenue in the Chinese iOS market as of July 10 [12][28]. Advertising and Social Network - The report forecasts that the video account feature will drive network advertising revenue to 30.8 billion RMB in FY24Q2, marking a 23% increase year-on-year. The growth in live-streaming e-commerce is expected to contribute significantly to advertising revenue [13][28]. - Social network revenue is projected to be 30.2 billion RMB in FY24Q2, with a modest year-on-year growth of 1.5% [29][28]. Financial Technology and Enterprise Services - Financial technology and enterprise services revenue is expected to reach 51.6 billion RMB in FY24Q2, reflecting a 6.0% year-on-year growth, although the growth rate is slowing due to weak offline consumption [30][28].

| --- | --- | --- | --- | --- | --- | |----------------|-------------------------|-------------------------|----------|-----------------------|-------------------| | | 收入 24E （亿人民币） | 利润 24E （亿人民币） | 估值方式 | 对应市值 （亿人民币） | 对应股价 ( 港元 ) | | 端游 | 456 | 203 | 15x PE | 3,038 | 35 | | 手游 | 1,724 | 704 | 25x PE | 17,593 | 205 | | 非游戏增值业务 | 803 | 72 | 20x PE | 1,433 | 17 | | 广告业务 | 1,015 | 358 | 25x PE | 8,939 | 104 | | 云业务 | 434 | | 4x PS | 1,735 | 20 | | 金融业务 | 1,685 | | 5x PS | 8,423 | 98 | | 投资 | | | | 4,104 | 48 ...

CMBIGM 不是美国的注册经纪交易商。因此，CMBIGM 不受 U.S.关于研究报告准备和研究分析师独立性的规则。主要负责本研究报告内容的研究分析师未在金融业监管局 （ "FINRA " ） 注册或获得研究分析师资格。分析师不受 FINRA 规则的适用限制，旨在确保分析师不会受到可能影响研究报告可靠性的潜在利益冲突的影响。本报告仅在美国发布给 "美国主要机 构投资者 "，如美国《 1934 年证券交易法》第 15a - 6 条所述，不得提供给美国的任何其他人。收到本报告副本并接受本报告的每个主要美国机构投资者均表示并同意其不得向任何其 他人分发或提供本报告。任何 U.S.本报告的收件人希望根据本报告中提供的信息进行任何买卖证券的交易，只能通过美国S.- 注册经纪交易商。 本文件在新加坡的收件人 本报告由 CMBI (新加坡) Pte 在新加坡分发。有限公司 （ CMBISG ） （ 公司注册。不。201731928D)，《财务顾问法》 (第110) 由新加坡金融管理局监管。CMBISG 可以根据《财务 顾问条例》第 32C 条的安排分发其各自的外国实体、附属公司或其他外国研究机构制作的报告。如果报告在新加坡 ...

15 Jul 2024 CMB International Global Markets | Equity Research | Company Update Earnings growth stability continues | --- | --- | --- | --- | --- | --- | |------------------------------|-----------|-----------|-----------|-----------|-----------| | (YE 31 Dec) | FY22A | FY23A | FY24E | FY25E | FY26E | | Revenue (RMB mn) | 554,552 | 609,015 | 658,280 | 712,260 | 764,432 | | Gross margin (%) | 43.1 | 48.1 | 53.1 | 53.8 | 54.3 | | Adjusted net profit (RMB mn) | 115,649.0 | 157,688.0 | 198,794.6 | 218,584.6 | 2 ...

Investment Rating - The report maintains a positive outlook on Tencent Holdings with adjusted revenue forecasts for 2024-2026 reflecting slight decreases of -0.3%, -0.4%, and -0.4% respectively, primarily due to a slowdown in payment revenue growth within the fintech segment [4]. Core Insights - The adjusted net profit forecasts for 2024-2026 have been increased by 5.6%, 7.4%, and 8.1% to reach RMB 218.3 billion, RMB 249 billion, and RMB 279.6 billion respectively, driven by improvements in gross margins across all business lines [4]. - The report highlights an increase in advertising gross margins due to a higher proportion of revenue from video accounts and efficiency improvements brought by AI, alongside enhanced gross margins in fintech driven by increased contributions from wealth management and consumer loans [4]. Financial Forecast Summary - Revenue projections for 2023 are set at RMB 609 billion, with a year-over-year growth of 10%. For 2024, the revenue is expected to reach RMB 665.6 billion, with a growth rate of 9% [1]. - Gross profit for 2023 is forecasted at RMB 3,560 million, reflecting a 1.3% increase from previous estimates, while the gross profit margin is expected to improve to 53.5% [5][12]. - The adjusted net profit for 2023 is projected at RMB 2,183 million, indicating a significant increase of 10.4% compared to prior estimates [12]. - The report anticipates a steady increase in operating profit margins, with adjusted operating profit for 2023 expected to be RMB 1,919 million, representing a year-over-year growth of 34% [1][5].

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | |--------------------------|----------------|-----------------|-----------------|-----------------|----------------|----------------|----------------|----------------|----------------|-----------------|-----------------|-----------------| | 总收入 | 2023 \n609,015 | 2024E \n673,025 | 2025E \n754,773 | 2026E \n830,644 | 1Q23 \n149,986 | 2Q23 \n149,208 | 3Q23 \n154,625 | 4Q23 \n155,196 | 1Q24 \n159,501 | 2Q24E \n163.034 | 3Q24E \n173 ...

Investment Rating - The investment rating for Tencent Holdings is "Outperform the Market" (maintained) [11][25]. Core Views - The report anticipates a 7% year-on-year revenue growth for Q2 2024, driven by stable growth in online advertising and a recovery in gaming business, while financial technology is impacted by macroeconomic conditions [6][29]. - The performance of the newly launched mobile game "DNF" is expected to significantly contribute to revenue in the upcoming quarters, with an estimated first-month revenue of 5 billion yuan [3][15]. - The video account feature is projected to drive a 20% increase in advertising revenue, enhancing monetization efficiency [28][48]. Summary by Sections Gaming Revenue - Domestic gaming revenue is expected to grow by 5% year-on-year, with the "DNF" mobile game performing exceptionally well since its launch on May 21 [3][13]. - The report estimates that Tencent's online gaming revenue for Q2 2024 will reach 476 billion yuan, reflecting a 7% year-on-year growth [18][29]. Financial Technology and Enterprise Services - Financial technology and enterprise services revenue is projected to be 501 billion yuan, a 3% year-on-year increase, with growth slowing due to macroeconomic factors [4][14]. - The report highlights that the main revenue source in this segment comes from payment services, which are closely tied to offline consumption [4]. Advertising Revenue - Advertising revenue is expected to reach 300 billion yuan in Q2 2024, marking a 20% year-on-year increase, primarily driven by the growth of the video account feature [35][48]. - The report notes that the video account's rapid user growth and the introduction of new advertising products will enhance monetization [28][51]. Profitability Forecast - The report forecasts a Non-IFRS net profit of 501 billion yuan for Q2 2024, representing a 33% year-on-year increase, with a net profit margin of 31% [16][28]. - The profit growth is attributed to high-quality growth in the business mix, leading to sustained improvements in gross margins [16][28].

Investment Rating - The report does not explicitly state an investment rating for the company [3]. Core Insights - Tencent's new game "Apex Warriors 2" was launched on July 6, 2024, allowing Android users immediate download, while iOS users are still awaiting access [3]. - The game features a 5V5 hero shooting format and offers special benefits for returning players, allowing them to redeem previous in-game purchases [3]. - Tencent showcased its advancements in AI large models at the World Artificial Intelligence Conference, emphasizing its leadership in the domestic AI model landscape [3]. - The company has initiated a significant share buyback program, repurchasing 10.63 million shares for a total of 4 billion HKD from July 2 to July 5, 2024 [3]. Company Overview - Tencent's market capitalization stands at 35,380 billion HKD, with a total share capital of 9.355 billion [3]. - The stock price is currently at 378 HKD, with a 52-week high of 400.2 HKD and a low of 256.8 HKD [3]. - The book value per share is reported at 89.7 HKD [3]. Industry Developments - Tencent's large model technology is becoming a core driver for various industries, with significant advancements in computational power and efficiency [3]. - The report highlights ten trends in AI development, indicating that large models are evolving to support human intelligence and enhance interaction capabilities [3].