Investment Rating - The report maintains a "Buy" rating for Tencent Holdings with a target price of HK$520.00, up from the previous target of HK$480.00 [1][12]. Core Insights - The report highlights improved visibility in gaming growth driven by titles such as "Dungeon & Fighter Mobile" and "Evergreen Games," alongside stable external operating environments for other business segments [1]. - The forecast for Tencent's online gaming revenue growth is set at 13% and 9% year-on-year for Q3 and Q4 of 2024, respectively, with an overall revenue growth expected to accelerate to 12% year-on-year [1][9]. - The report anticipates a 9.5% year-on-year increase in domestic mobile game revenue for 2024, reaching RMB 131.85 billion [7]. Summary by Sections Investment Rating - Rating: Buy - Target Price: HK$520.00, reflecting a 20% upside from the current price of HK$434.20 [1]. Financial Projections - 2024E Revenue: RMB 658.95 billion, with a 0% change from previous estimates [9]. - 2024E EPS: RMB 22.57, down 2% from prior estimates [9]. - 2025E EPS: RMB 24.70, up 4% from prior estimates [9]. Gaming Segment - Domestic mobile game revenue is projected to grow to RMB 131.85 billion in 2024, with a year-on-year growth of 9.5% [7]. - The report expects "Dungeon & Fighter Mobile" and "Evergreen Games" to contribute significantly to revenue growth [1]. Advertising and Financial Services - Q3 2024 advertising revenue is forecasted to grow by 15% year-on-year, with social advertising expected to increase by 16% [1]. - Financial technology and enterprise services are projected to see revenue growth of 1.5% and 11% year-on-year, respectively [1]. Valuation - The SOTP valuation breakdown includes: - Online gaming segment valued at HK$1.6 trillion based on 18x 2025 P/E [12]. - Social value-added services estimated at HK$253 billion based on 15x 2025 P/E [12]. - Financial technology segment valued at HK$991 billion based on 5x 2025 P/S [12].

Investment Rating - The report assigns a "Buy" rating for Tencent Holdings (700 HK) with a target price of HKD 513.00, indicating a potential upside of 16.9% from the current price of HKD 438.80 [1][3][18]. Core Insights - The report highlights that mobile gaming continues to show robust growth, with profit growth expected to outpace revenue growth [1]. - Domestic mobile game revenue is projected to grow by 15% year-on-year in Q3 2024, accelerating from 10% growth in the first half of the year [2]. - The report anticipates that Tencent will maintain a trend of profit growth exceeding revenue growth due to ongoing cost control and operational leverage [2]. Financial Summary - Revenue (in million RMB): - 2022: 554,552 - 2023: 609,015 - 2024E: 657,575 - 2025E: 721,654 - 2026E: 768,333 - Year-on-year growth rates: - 2023: 9.8% - 2024E: 8.0% - 2025E: 9.7% - 2026E: 6.5% [3][19]. - Net Profit (in million RMB): - 2022: 115,649 - 2023: 157,688 - 2024E: 207,933 - 2025E: 229,754 - 2026E: 257,385 - Year-on-year growth rates: - 2023: 37.6% - 2024E: 34.4% - 2025E: 12.1% - 2026E: 13.2% [3][19]. - Earnings Per Share (in RMB): - 2022: 11.86 - 2023: 16.33 - 2024E: 21.94 - 2025E: 24.60 - 2026E: 27.84 [3][19]. Revenue Breakdown - Domestic mobile game revenue is expected to grow by 15% year-on-year in Q3 2024, driven by new game contributions [2]. - Overseas mobile game revenue is projected to grow by 18% year-on-year in Q3 2024, supported by Supercell's "Brawl Stars" [2]. - Advertising revenue growth is expected to be 16% year-on-year in Q3 2024, slightly down from previous expectations due to budget adjustments by advertisers [2]. Valuation and Outlook - The report maintains net profit expectations for 2024/25 and adjusts the valuation to 20 times the earnings for 2025, raising the target price to HKD 513.00 from HKD 486.00 [2].

Investment Rating - The report maintains a "Buy" rating for the company as of October 15, 2024 [1]. Core Insights - The company is expected to achieve strong revenue growth driven by its gaming and advertising segments, with significant profit margin improvements anticipated [3][18]. - Revenue forecasts for FY2024-2026 are projected at 656.4 billion, 715.7 billion, and 774 billion RMB respectively, with Non-IFRS net profits expected to be 220.7 billion, 250.3 billion, and 280.9 billion RMB [3][18]. Revenue Forecasts - **Gaming Segment**: Anticipated revenue for Q3 2024 is 518 billion RMB, reflecting a year-on-year growth of 13%. Key contributors include "DNF Mobile" and strong performances from "Supercell's Brawl Stars" and "Valorant" [7][8]. - **Advertising Segment**: Expected revenue for Q3 2024 is 298 billion RMB, with a year-on-year increase of 16%. The growth is driven by video ads and strong performance in sectors like e-commerce and short dramas [10][11]. - **Financial Technology and Enterprise Services**: Projected revenue for Q3 2024 is 536 billion RMB, showing a year-on-year growth of 3%. The segment is supported by healthy growth in wealth management and stable cloud services [16][17]. Profitability Metrics - The company is expected to achieve a gross margin of 53% in Q3 2024, with Non-IFRS operating profit projected at 607 billion RMB, reflecting an 18% year-on-year increase [5][18]. - Non-IFRS net profit margin is expected to reach 34% in Q3 2024, up 5 percentage points year-on-year [5]. Valuation - The target market capitalization for the company is set at 4.0 trillion RMB (4.4 trillion HKD) for 2024, with a target price of 490 HKD per share based on the SOTP valuation method [18][19].

Investment Rating - The report maintains a "Recommended" rating for Tencent Holdings (00700.HK) [1][4] Core Views - The report anticipates Tencent's revenue for Q3 2024 to reach 167.2 billion RMB, representing a year-over-year (YOY) increase of 8% and a quarter-over-quarter (QOQ) increase of 4% [1] - The expected gross profit is 89.1 billion RMB, with a YOY increase of 16% and a QOQ increase of 4%, leading to a gross profit margin (GPM) of 53% [1] - Non-IFRS operating profit is projected at 61 billion RMB, a YOY increase of 18% and a QOQ increase of 4% [1] - Non-IFRS net profit attributable to shareholders is expected to be 54.6 billion RMB, reflecting a YOY increase of 22% but a QOQ decrease of 5% [1] Revenue Breakdown - **Value-Added Services**: Anticipated revenue of 52.3 billion RMB for online gaming, with a YOY increase of 13% and a QOQ increase of 8% [1] - Domestic market gaming revenue is expected to be 37 billion RMB, a YOY increase of 13% [1] - International market gaming revenue is projected at 15.2 billion RMB, a YOY increase of 15% [1] - **Social Network Services**: Expected revenue of 30.8 billion RMB, with a YOY increase of 4% and a QOQ increase of 2% [1] - **Advertising**: Projected revenue of 29.6 billion RMB, a YOY increase of 15% but a QOQ decrease of 1% [1] - **Financial Technology and Business Services**: Expected revenue of 53.4 billion RMB, a YOY increase of 3% and a QOQ increase of 6% [1] Financial Forecasts - Revenue forecasts for 2024-2026 have been slightly adjusted to 661.1 billion RMB, 718.9 billion RMB, and 773.3 billion RMB respectively, with YOY growth rates of 9% for each year [1] - Non-IFRS net profit forecasts have been adjusted to 218.6 billion RMB, 244 billion RMB, and 271.1 billion RMB for the same period, with a YOY growth of 39% in 2024 [1] - Non-IFRS EPS is projected at 23.82 RMB, 27.28 RMB, and 31.08 RMB for 2024-2026, with a YOY growth of 43% in 2024 [1] Target Price - The target price range is set between 471.25 and 523.61 HKD, based on a valuation of 18-20 times the 2024 Non-IFRS EPS [1][4]

Investment Rating - Tencent Holdings (00700 HK) maintains an "Outperform" rating [2][4][13] Core Views - Tencent is expected to achieve revenue of RMB 1684 billion in 2024Q3, a 9% YoY growth, with adjusted net profit attributable to shareholders of RMB 555 billion, up 24% YoY [3][5] - The company's advertising business is expected to grow 16% YoY, driven by video account traffic and the launch of the advertising system 3 0 [3][5] - The gaming business is projected to grow 13% YoY, with domestic games up 15% and overseas games up 9% [3][7] - Financial technology and enterprise services are expected to grow 3% YoY, impacted by macroeconomic conditions [3][5] Business Segment Analysis Gaming - Domestic gaming revenue is expected to grow 15% YoY, with key games like "Peace Elite" and "Naruto Mobile" showing strong performance [7] - Overseas gaming revenue is projected to grow 9% YoY, with "Brawl Stars" maintaining a strong position [7] - "DNF Mobile" saw a decline in user numbers but remains a top performer in the iOS bestseller rankings [7][8] Advertising - Advertising revenue is expected to grow 16% YoY, supported by video account traffic and the launch of the advertising system 3 0 [3][10] - WeChat Mini Stores have activated full-domain traffic, potentially accelerating video account growth [10] - AI-powered advertising is expected to improve CTR by 5-10% [10] Financial Technology & Enterprise Services - Revenue is expected to grow 3% YoY, with payment services impacted by macroeconomic conditions [3][11] - High-margin businesses like wealth management are growing healthily [4] Financial Forecasts - Adjusted net profit for 2024-2026 is forecasted at RMB 2198/2482/2729 billion, with a slight downward revision of 1% for each year [4][13] - Target price is set at HKD 471-528, based on a 16-18x PE ratio for 2025 [4][13] Key Financial Metrics - 2024Q3 revenue is expected to reach RMB 1684 billion, with a gross margin of 53% and a Non-IFRS net margin of 33% [6] - Adjusted EPS for 2024-2026 is projected at RMB 24 05/26 23/28 03 [16]

Investment Rating - The report maintains a "Buy" rating for Tencent Holdings with a target price of HKD 495.00, up from the previous target of HKD 465.35 [3][6] Core Views - Tencent's 3Q revenue is expected to grow 9.3% YoY, with advertising revenue slowing to 16% YoY due to macroeconomic factors [3] - Long-term growth drivers include the potential launch of new games like "Honor of Kings: World" and "Dawn" in 2025, which could generate monthly revenues of RMB 1.5-2.5 billion [3] - Video account advertising load rates are expected to increase in 4Q, and the integration of WeChat Pay with Taotian could boost advertising and payment revenue CAGR by 3-4 percentage points from 2025-2026 [3][4] - Non-GAAP net profit forecasts for 2024-2026 have been revised upward by 0.9%, 1.1%, and 0.5% to RMB 216.3 billion, RMB 250.3 billion, and RMB 285.2 billion, respectively [3] Financial Performance - 3Q gaming revenue is expected to grow 13.4% YoY, with domestic and international gaming revenues increasing by 12.4% and 16.0%, respectively [5] - The "DnF" mobile game contributed RMB 8-9 billion in 3Q, while "Peacekeeper Elite" saw iOS revenue growth of 22% and 24% YoY in August and September [5] - During the National Day holiday, Tencent's iOS gaming revenue grew 15% YoY, driven by strong performances from "Golden Shovel," "Peacekeeper Elite," and "Naruto" [5][12] Strategic Developments - The integration of WeChat Pay with Taotian is expected to generate RMB 4-8 billion in annualized commission revenue, primarily from lower-tier cities [4][9] - WeChat Shop upgrades and incentive policies are projected to contribute RMB 150-300 billion in GMV over the next two years [4] - Tencent's video account advertising is expected to accelerate in 4Q, driven by the peak season for live-streaming e-commerce [4] Gaming Segment - Tencent's gaming segment remains robust, with "DnF" mobile game maintaining high rankings on the iOS bestseller list since its launch in May [5] - New games like "Delta Action" achieved RMB 15-25 million in first-week revenue, while "Peacekeeper Elite" saw significant revenue growth due to accelerated commercialization [5][12] - Tencent is focusing on optimizing player experience for "DnF," with updates including new professions, pet functions, and PVP balance adjustments [15][16][17] Valuation and Forecasts - The SOTP valuation for Tencent is based on a sum-of-the-parts approach, with gaming, social networks, online advertising, fintech, and enterprise services contributing to the target price of HKD 495.00 [29] - Revenue forecasts for 2024-2026 have been revised upward by 0.1%, 0.8%, and 1.5%, respectively, driven by stronger advertising and payment revenue growth [22] - Adjusted net profit forecasts for 2024-2026 are RMB 216.3 billion, RMB 250.3 billion, and RMB 285.2 billion, reflecting higher-margin business contributions [22]

Investment Rating - The report maintains a "Buy" rating for Tencent Holdings [7] Core Views - Tencent is expected to achieve operating revenue of 165.8 billion RMB in Q3 2024, representing a year-on-year growth of 7%, and an adjusted net profit of 53.5 billion RMB, a year-on-year increase of 19% [4] - Recent positive policy signals have boosted capital market sentiment, enhancing Tencent's company valuation; the fundamental outlook remains relatively strong, driven by growth in gaming and video accounts [4] - Tencent has repurchased 250 million shares this year, totaling 88.3 billion HKD, leading to a continuous decrease in total share capital [4] Revenue and Profit Forecast - The projected operating revenue for Tencent is as follows: - 2024E: 655.8 billion RMB - 2025E: 717.7 billion RMB - 2026E: 770.1 billion RMB [10] - Adjusted net profit forecasts are: - 2024E: 215.8 billion RMB - 2025E: 241.6 billion RMB - 2026E: 273.2 billion RMB [10] Segment Performance - Gaming revenue is expected to grow by 12% year-on-year in Q3 2024, with both domestic and overseas markets showing double-digit growth [4] - Advertising revenue is projected to increase by 15% year-on-year in Q3 2024, with video accounts being a core growth driver [4] - Financial technology and enterprise services revenue is expected to grow by 2% year-on-year in Q3 2024 [4] Valuation - The target market capitalization has been raised from 4285.4 billion RMB to 4719.0 billion RMB, corresponding to a target price of 559 HKD, indicating a potential upside of 27% [7] - The report outlines a sum-of-the-parts (SOTP) valuation approach, estimating the total market value at 4719.0 billion RMB based on various business segments [9]

Group 1 - The article highlights Tencent Music Entertainment Group (TME) as a strong investment opportunity, maintaining a Buy rating due to its defensive revenue from music services and growth potential in Average Revenue Per Paying User (ARPPU) [1] - TME's focus on self-developed content is noted as a positive factor for its future performance [1] - The research service Asia Value & Moat Stocks targets value investors looking for significant price and intrinsic value discrepancies in Asia-listed stocks, particularly in the Hong Kong market [1] Group 2 - The service emphasizes deep value balance sheet bargains and wide moat stocks, indicating a strategy of investing in undervalued assets and high-quality businesses [1] - Monthly updates and watch lists are provided to assist investors in identifying potential investment opportunities [1]

Investment Rating - The report maintains a "Buy" rating for the company, with a target price of 486.56 HKD per share [4][13]. Core Views - The company is expected to achieve a revenue of 165.8 billion RMB in Q3 2024, reflecting a year-over-year growth of 7% and a quarter-over-quarter growth of 3% [2]. - The Non-GAAP net profit for Q3 2024 is projected to reach 54.2 billion RMB, indicating a year-over-year increase of 21% but a quarter-over-quarter decrease of 5% [2]. - The report highlights a positive trend in gaming performance, resilient advertising revenue, and a financial services segment impacted by weak consumer spending [2]. Summary by Sections Q3 2024 Performance Forecast - Expected revenue of 165.8 billion RMB, with gaming revenue at 51.5 billion RMB (YoY +12%, QoQ +6%) and social network revenue at 29.9 billion RMB (YoY +1%, QoQ -1%) [2][9]. - Advertising revenue is anticipated to be 29.6 billion RMB (YoY +15%, QoQ -1%), driven by video content, while financial and enterprise services revenue is expected to be 53.7 billion RMB (YoY +3%, QoQ +6%) [2][9]. Earnings Forecast and Investment Recommendations - The company is projected to achieve revenues of 657 billion RMB and 715.1 billion RMB in 2024 and 2025, respectively, with adjusted net profits of 216.3 billion RMB and 242.5 billion RMB [2][3]. - The report emphasizes the strong product cycle in gaming and the resilience of advertising, with potential recovery in financial services as consumer spending rebounds [2][3]. Financial Metrics - The report provides detailed financial projections, including a Non-GAAP EPS of 5.68 RMB for Q3 2024, with a projected growth rate of 22% YoY [2][17]. - The company’s revenue growth rates are forecasted at 7.9% for 2024 and 8.9% for 2025, with a significant increase in adjusted net profit growth of 39.5% in 2024 [3][17].

Company Overview - Tencent Holding Ltd. (TCEHY) currently holds a Momentum Style Score of A, indicating strong momentum potential [2] - The company has a Zacks Rank of 2 (Buy), suggesting a favorable outlook compared to the market [2] Price Performance - TCEHY shares have increased by 6.54% over the past week, while the Zacks Internet - Services industry remained flat [3] - Over the past month, TCEHY's price change is 22.08%, significantly outperforming the industry's 5.17% [3] - In the last quarter, TCEHY shares rose by 18.15%, and over the past year, they increased by 43.17% [4] - In comparison, the S&P 500 has moved 3.54% and 35.24% over the same periods [4] - The average 20-day trading volume for TCEHY is 3,798,429 shares, indicating strong trading activity [4] Earnings Outlook - In the past two months, 2 earnings estimates for TCEHY have been revised upwards, while none have been lowered, boosting the consensus estimate from $2.93 to $3.05 [5] - For the next fiscal year, 2 estimates have also moved upwards with no downward revisions [5] Conclusion - Given the strong price performance and positive earnings outlook, TCEHY is positioned as a promising investment opportunity with a Momentum Score of A [6]