Investment Rating - The report maintains a "Buy" rating for Tencent Holdings (00700.HK) with a target price range of HKD 473.63 - 526.25, based on a 24-year NON-IFRS EPS valuation of 18-20x PE [1][10]. Core Insights - Tencent's 2Q24 results showed strong revenue resilience, with total revenue reaching CNY 161.1 billion, a year-over-year increase of 8%, aligning with Bloomberg consensus expectations. The gross profit was CNY 85.9 billion, up 21% year-over-year, resulting in a gross profit margin of 53.3% [1][41]. - The NON-IFRS net profit attributable to shareholders was CNY 57.3 billion, reflecting a significant year-over-year increase of 53%, exceeding Bloomberg consensus expectations [1][41]. - The report highlights that the gaming segment has crossed its low point, with domestic and overseas game revenues showing positive growth trends [1][41]. Revenue Breakdown - **Gaming Revenue**: - Overseas gaming revenue reached CNY 13.9 billion, up 9% year-over-year, driven by titles like "PUBGM" and "Brawl Stars" [1][41]. - Domestic gaming revenue was CNY 34.6 billion, also up 9% year-over-year, primarily from "Dungeon & Fighter: Origin" and "Valorant" [1][75]. - **Social Network Revenue**: - Revenue from social networks was CNY 30.3 billion, a 2% year-over-year increase, with a notable rise in paid memberships for Tencent Video [1][52]. - **Advertising Revenue**: - Advertising revenue reached CNY 29.9 billion, up 19% year-over-year, driven by growth in video and long-form video advertising [1][74]. - **Financial Technology and Enterprise Services**: - This segment generated CNY 50.4 billion, a 4% year-over-year increase, with cloud services and enterprise WeChat contributing significantly [1][74]. Future Outlook - The report anticipates continued revenue growth in the gaming sector, supported by deferred revenue recognition and a stable user base. Upcoming game releases and seasonal events are expected to drive further revenue contributions [1][10][41]. - The advertising business is projected to grow faster than the industry average, bolstered by increased user engagement in video and mini-programs [1][10].

Investment Rating - The report maintains a "Buy" rating for Tencent Holdings (00700.HK) with a target price range of HKD 473.63 - 526.25, based on a 24-year NON-IFRS EPS valuation of 18-20x PE [4][5]. Core Insights - Tencent's 2Q24 financial results showed strong revenue resilience and profits significantly exceeding expectations, with total revenue reaching CNY 161.1 billion, a year-over-year increase of 8%, and NON-IFRS net profit of CNY 57.3 billion, up 53% year-over-year [4][61]. - The gaming segment is expected to accelerate growth due to deferred revenue recognition and stable performance, while the advertising business is anticipated to outpace industry growth driven by increased commercialization of video accounts and higher user engagement in mini-programs [5][4]. Financial Performance Summary - **Revenue and Profitability**: In 2Q24, Tencent achieved revenue of CNY 161.1 billion, with a gross profit margin of 53.3%, and NON-IFRS net profit of CNY 57.3 billion, significantly above Bloomberg consensus estimates [4][61]. - **Segment Performance**: - **Gaming**: Revenue from overseas games reached CNY 13.9 billion, up 9% year-over-year, driven by titles like "PUBGM" and "Brawl Stars" [4][66]. - **Social Networks**: Revenue was CNY 30.3 billion, a 2% increase year-over-year, supported by popular series on Tencent Video [4][72]. - **Advertising**: Revenue grew by 19% year-over-year to CNY 29.9 billion, primarily due to growth in video accounts and long-form video advertising [4][101]. - **Financial Technology and Enterprise Services**: Revenue was CNY 50.4 billion, a 4% increase year-over-year, with cloud services contributing significantly [4][83]. Future Outlook - The report anticipates continued strong performance in the gaming sector, with new game releases expected to convert user engagement into revenue. Upcoming titles include "Delta Force" and "Honor of Kings: Dawn of the Stars" [4][70][73]. - The advertising business is projected to benefit from improved user engagement and content-driven growth, with expectations for a gradual increase in revenue growth rates [4][5].

[Table_Summary] 业绩总结：腾讯 2024 年第二季度实现营收 1611 亿元，同比增长 8%；实现 Non-IFRS 净利润 573 亿元，同比增长 53%。 金融科技增速放缓，企业服务持续拓展。Q2金融科技和企业服务收入 504亿元， 同比增长 4%。其中金融科技服务收入增速有所放缓；企业服务业务收入实现双 位数同比增长，云服务收入及视频号商家技术服务费增长，企业微信商业化提 升有所贡献。 投资要点 西南证券研究发展中心 [Table_Report] 1. 腾讯控股（0700.HK）：业务高质量发 展，利润增长强劲 (2024-05-21) 2. 腾讯控股（0700.HK）：元梦之星上线， 合家欢游戏热潮再起 (2023-12-22) 3. 腾讯控股（0700.HK）：混元大模型发 布，AI 商业化提速 (2023-09-11) 4. 腾讯控股（0700.HK）：业务高质量发 展，微信生态繁荣 (2023-08-22) | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | |------------------------ ...

Investment Rating - The report maintains a "Buy" rating for Tencent Holdings with a target price of 476 HKD, indicating an expected relative return of over 20% within the next six months [5][8]. Core Insights - Tencent's overall performance in Q2 2024 shows strong profitability, with revenue growth of 8% year-on-year and a significant increase in Non-IFRS net profit by 53% year-on-year, exceeding market expectations [8]. - The company's gross profit margin improved to approximately 53.3%, reflecting a year-on-year increase of 5.8 percentage points, indicating a positive trend in profitability [8]. - The management anticipates a continued shift towards a higher gross margin business mix, although the growth rate of gross profit may slow down as efficiency measures begin to show diminishing returns [8]. Summary by Sections Overall Performance - Q2 2024 revenue increased by 8% year-on-year and 1% quarter-on-quarter, aligning with Bloomberg's expectations [8]. - Non-IFRS operating profit rose by 27% year-on-year, while Non-IFRS net profit reached 86 billion HKD, marking a 53% year-on-year increase [8]. Gaming Sector - The gaming revenue growth rate has recovered, with a year-on-year increase of 9% in Q2 2024, driven by popular titles such as "Honor of Kings" and "Peacekeeper Elite" [8]. - The management expects continued revenue growth in the gaming sector, supported by strong performance in both domestic and overseas markets [8]. Advertising Sector - Advertising revenue grew by 19% year-on-year in Q2 2024, benefiting from the performance of video accounts and long videos [8]. - The company aims to enhance its advertising strategy through technology upgrades and increasing the proportion of closed-loop advertising [8]. Financial Technology and Enterprise Services - Financial technology and enterprise services revenue saw a modest increase of 4% year-on-year, impacted by a slowdown in consumer spending and stricter risk management measures [8]. - The growth in cloud services and video account merchant service fees contributed positively to enterprise services [8]. Investment Recommendations - The report projects Non-IFRS net profit for 2024-2026 to be 217.8 billion, 251.7 billion, and 278.6 billion HKD respectively, with year-on-year growth rates of 38%, 16%, and 11% [8]. - The current valuation metrics indicate that Tencent's stock is trading at a relatively low price-to-earnings ratio compared to historical averages, suggesting potential for valuation improvement as gaming growth resumes [8].

Investment Rating - The report maintains a "Buy" rating for the company, citing strong business barriers and a robust ecosystem, with growth in video accounts, mini-programs, and fintech businesses [1] Core Views - The company's gross margin improvement exceeded expectations, leading to an upward revision of adjusted net profit forecasts for 2024-2026 to 2050/2381/2692 billion yuan, with corresponding PE ratios of 17/14/13x [1] - 2Q24 revenue reached 1611 billion yuan (yoy+8%), slightly below Bloomberg consensus of 1614 billion yuan, while non-IFRS net profit was 573 billion yuan (yoy+53%), significantly exceeding the consensus of 487 billion yuan [11][14] - Overall gross margin in 2Q24 was 53.31% (yoy+5.83pct), driven by rapid growth in high-margin revenue sources such as advertising and value-added services [13][68] Business Performance Gaming - 2Q24 online gaming revenue was 485 billion yuan (yoy+9%), in line with Bloomberg consensus of 488 billion yuan [15][26] - Domestic gaming revenue was 346 billion yuan (yoy+9%), above consensus of 336 billion yuan, driven by growth in titles like "Valorant" and "Dungeon & Fighter: Origins" [28] - International gaming revenue was 139 billion yuan (yoy+9%), slightly below consensus of 141 billion yuan [44] Advertising - 2Q24 advertising revenue was 299 billion yuan (yoy+19%), above Bloomberg consensus of 294 billion yuan, driven by growth in WeChat video accounts, long videos, and mini-programs [15][32] - Advertising gross margin was 55.64% (yoy+6.7pct), benefiting from increased revenue from WeChat video accounts and search ads [38] Fintech and Business Services - 2Q24 fintech and business services revenue was 504 billion yuan (yoy+4%), below Bloomberg consensus of 524 billion yuan, with slower growth in commercial payments and a decline in consumer loan services [13][33] - Wealth management services saw double-digit growth, while enterprise services grew by double digits, driven by cloud services and video account merchant service fees [13][34] - Fintech and business services gross margin was 47.64% (yoy+9.26pct), supported by higher-margin wealth management services and video account merchant fees [69] Social Networks - 2Q24 social network revenue was 305 billion yuan (yoy-2%), in line with Bloomberg consensus, with growth in music and long video subscriptions offset by declines in music and game live streaming [44] User Metrics - WeChat (including WeChat overseas) MAU reached 1.371 billion (yoy+3%), above Bloomberg consensus of 1.356 billion [50] - QQ mobile MAU was 571 million (yoy+0%), above consensus of 568 million [50] - Paid value-added service accounts reached 263 million (yoy+12%), above consensus of 259 million [50] Financial Forecasts - Revenue for 2024-2026 is forecasted at 6651/7324/8101 billion yuan, with yoy growth of 9.21%/10.11%/10.60% [14] - Non-IFRS net profit for 2024-2026 is projected at 2050/2381/2692 billion yuan, with yoy growth of 30.03%/16.10%/13.10% [14] - EPS for 2024-2026 is estimated at 19.78/20.16/21.16 yuan per share [14]

Blackrock (2.25%) 总营业收入（人民币百万元） 554,552 609,015 660,135 720,379 778,596 变动 -0.99% 9.82% 8.39% 9.13% 8.08% 经调整净利润 115,649 157,688 226,524 259,907 284,799 变动 -6.57% 36.35% 43.65% 14.74% 9.58% 经调整每股盈利（人民币元） 11.93 16.41 24.00 27.83 30.66 变动 -6.05% 37.55% 46.23% 15.97% 10.17% 股息 2.40 3.40 4.30 5.00 5.60 市盈率368.4港元（估） 28.39 20.64 14.11 12.17 11.05 0 50 100 150 200 250 300 350 400 450 盈利能力持续改善，游戏业务企稳回升 富达 (1.59%) 截至12月31日止财政年度 22年实际 23年实际 24年预测 25年预测 26年预测 来源: 公司资料, 第一上海预测 来源: Bloomberg 游戏业务企稳回升: 2024Q2 国际市场游戏业务录 ...

活跃用户增速放缓风险、新游审批进度风险、视频内容监管风险、内容成本快速 增加风险、渠道成本快速增加风险、竞争风险、反垄断风险、金融政策变更风险、 投资风险、估值调整风险、视频号广告及微信小游戏扩张不及预期等。 本报告的风险等级定级为 R4，仅供符合国海证券股份有限公司（简称"本公司"）投资者适当性管理要求的客 户（简称"客户"）使用。本公司不会因接收人收到本报告而视其为客户。客户及/或投资者应当认识到有关本 报告的短信提示、电话推荐等只是研究观点的简要沟通，需以本公司的完整报告为准，本公司接受客户的后续 问询。 【国海证券投资评级标准】 任何形式的分享证券投资收益或者分担证券投资损失的书面或口头承诺均为无效。本公司、本公司员工或者关联 机构亦不为该机构之客户因使用本报告或报告所载内容引起的任何损失承担任何责任。 2024 年 08 月 18 日 公司研究 评级：买入(维持) [Table_Title] 核心业务高质量增长，利润持续强劲释放 最近一年走势 2024 年 8 月 14 日公司公告 2024Q2 财报，2024Q2 实现营收 1611 亿元 （yoy+8%, qoq+1%），营业利润 507 亿元（ ...

Investment Rating - The report maintains a "Buy" rating for Tencent Holdings [3][27]. Core Views - Tencent's Q2 2024 revenue reached 161.1 billion RMB, a year-on-year increase of 8%, aligning with expectations; adjusted operating profit grew by 27% to 58.4 billion RMB, and adjusted net profit surged by 53% to 57.3 billion RMB, significantly exceeding Bloomberg consensus of 48.7 billion RMB [3][27]. - The report highlights the resilience of Tencent's advertising revenue, which grew by 19% year-on-year in Q2, driven by user traffic growth and enhanced advertising technology [7][27]. - The overall gross margin for Q2 was 53.3%, marking a historical high, with core business margins also improving [8][27]. Summary by Sections Financial Performance - Tencent's revenue for 2024 is projected to be 664.2 billion RMB, with a year-on-year growth rate of 9.1% [21]. - The adjusted net profit forecast for 2024 is 214.9 billion RMB, reflecting a 36.3% increase compared to 2023 [21][27]. Market Position - Tencent has repurchased 61.4 billion HKD worth of shares as of July 12, 2024, indicating strong capital return strategies [6][32]. - The competitive landscape for internet companies remains favorable, with high growth certainty in gaming and increasing contributions from e-commerce and AI [6][27]. Business Segments - Domestic game revenue grew by 9% year-on-year, with flagship titles showing recovery and new games contributing positively [26][27]. - Financial technology and enterprise services revenue increased by 4% year-on-year, with enterprise services showing robust growth despite challenges in financial services [27]. Valuation - The target market capitalization has been adjusted from 45,266 billion RMB to 42,854 billion RMB, with a target price set at 504 HKD, indicating a potential upside of 35% [27].

Investment Rating - The report maintains a "Buy" rating for Tencent Holdings [18] Core Views - Tencent's Q2 2024 revenue reached 161.1 billion RMB, showing a year-over-year (YoY) increase of 8% and a quarter-over-quarter (QoQ) increase of 1%, slightly below Bloomberg's consensus estimate of 161.35 billion RMB [16][26] - Non-GAAP net profit for Q2 2024 was 57.3 billion RMB, reflecting a YoY increase of 53% and a QoQ increase of 14%, exceeding the consensus estimate by 18% [16][26] - The gaming segment showed recovery with Q2 2024 revenue of 48.5 billion RMB, up 9% YoY and 1% QoQ, surpassing the consensus estimate of 47.3 billion RMB [16][30] - Advertising revenue reached 29.9 billion RMB in Q2 2024, a YoY increase of 19% and QoQ increase of 13%, driven by growth in video and long-form content [16][32] Financial Summary - Main revenue growth rates are projected as follows: -1.0% in 2022, 9.8% in 2023, 8.2% in 2024, 8.5% in 2025, and 7.4% in 2026 [3][17] - Non-GAAP net profit is expected to grow from 1,149 million RMB in 2022 to 2,166 million RMB in 2024, reflecting a growth rate of 39.7% [3][17] - Non-GAAP EPS is projected to increase from 12.00 RMB in 2022 to 23.24 RMB in 2024 [3][17] Business Segment Performance - Gaming revenue is expected to reach 196.5 billion RMB in 2024, with a growth rate of 9% [16][57] - Social network revenue is projected to be 121.9 billion RMB in 2024, reflecting a growth of 3% [16][57] - Financial and enterprise services revenue is anticipated to grow to 212.4 billion RMB in 2024, with a growth rate of 4% [16][46] Valuation - The estimated fair value of Tencent's stock is 453.34 HKD per share, based on a sum-of-the-parts (SOTP) valuation [16][49] - The report suggests that Tencent's core business value is approximately 3.83 trillion HKD, with an additional 396.1 billion HKD from investment business [16][49]

Freer Law/iStock Editorial via Getty Images Tencent (OTCPK:TCEHY) has been a strong performer relative to US tech peers, a seemingly unusual occurrence in the recent past. The company continues to represent an enviable collection of businesses spanning across multiple facets of daily Chinese life. However, I am growing concerned about the inability for overall growth rates to accelerate - potentially indicating that the company may have finally reached that inevitable moment where it is simply too big for i ...