Summary of Tencent Holdings (0700.HK) 3Q25E Preview Company Overview - **Company**: Tencent Holdings (0700.HK) - **Reporting Date**: 3Q25 results to be reported on November 13, 2025 Key Industry Insights - **Gaming Sector**: - Anticipated strong performance driven by titles such as Delta Force and Peacekeeper Elite - Delta Force's daily active users (DAU) surpassed 30 million in September 2025, supported by promotional activities [3][12] - Tencent maintained a dominant position in mobile gaming, capturing 8 out of the top 10 grossing mobile games in China by the end of September 2025 [3][11] - **Advertising Sector**: - Marketing services revenue expected to sustain growth at approximately 20% year-over-year, aided by AI-powered ad technology and the growth of video accounts and mini shops [1][2] Financial Projections - **3Q25 Revenue Forecast**: - Total revenues projected to increase by 13.5% year-over-year to RMB 189.7 billion, with non-GAAP net profit expected to rise by 11% year-over-year to RMB 66.4 billion [2][10] - Online gaming revenues anticipated to grow by 17% year-over-year to RMB 60.6 billion, with domestic and international games expected to grow by 15% and 22% respectively [2][55] - **4Q25 Outlook**: - Potential offset of soft gaming seasonality by deferred revenues from previous quarters and marketing services revenue benefiting from e-commerce festivals [1][2] Core Financial Metrics - **Earnings Summary**: - 2025E Net Profit: RMB 255.3 billion, with a diluted EPS of RMB 27.596 [5][10] - Projected growth rates for sales revenue and core NPAT are 13.0% and 14.6% respectively for 2025 [10][55] Notable Game Titles and Performance - **Top Mobile Games**: - Honour of Kings (HoK) remains the top-grossing mobile game, followed by Delta Force, which has recently surpassed Peacekeeper Elite in grossing [12][17] - Delta Force's MAU reached 49.4 million in August 2025, indicating strong user engagement [20][21] - **New Game Releases**: - Tencent released four new titles in 3Q25, including Valorant Mobile, which performed well in downloads and grossing [48][51] - A solid pipeline of 96 mobile games is expected to support future revenue growth [52][55] AI and Technology Developments - **AI Integration**: - Tencent's Hunyuan 3D model has improved modeling accuracy by three times, with over 40% of new code generated by AI [4][1] - Continued growth in Tencent Cloud's international business, maintaining high double-digit growth over the past three years [4] Investment Recommendation - **Rating**: Maintain Buy - **Target Price**: HK$735, representing a potential upside of 12.8% from the current price of HK$651.50 [6][10] Conclusion - Tencent is positioned for a solid performance in 3Q25, driven by strong gaming revenues and advertising growth, with a robust pipeline of new games and advancements in AI technology. The company is expected to continue its leadership in the gaming sector while capitalizing on advertising opportunities.

Core Insights - The company is expected to achieve a revenue of 188.6 billion yuan in Q3 2025, representing a year-on-year growth of 13% [1] - The growth in value-added services is projected to be 91.6 billion yuan, with gaming revenue at 59.1 billion yuan (YoY +14%) and social networking at 32.6 billion yuan (YoY +5%) [1] - Online advertising revenue is anticipated to reach 36.7 billion yuan, showing a year-on-year increase of 22% [2] - Financial technology and enterprise services are expected to generate 58.9 billion yuan, with a growth rate of 11% [2] Gaming Sector - Revenue from gaming is projected to grow by 14% year-on-year in Q3 2025, with domestic and overseas markets growing by 8% and 29% respectively [1] - The domestic gaming market remains stable, with the shooting genre performing particularly well, and the game "Delta Force" expected to exceed 8 billion yuan in single-quarter revenue [1] Marketing Services - Revenue from marketing services is expected to increase by 22% year-on-year in Q3 2025, driven primarily by the WeChat ecosystem [2] - The advertising business benefits from strong performance in video accounts, mini-programs, and search ads, with improved advertising efficiency and conversion rates due to the synergy of content ecology and AI capabilities [2] Financial Technology and Enterprise Services - Revenue in this segment is projected to grow by 11% year-on-year in Q3 2025, with stable performance in payment services and double-digit growth in wealth management and micro-loan services [2] - Cloud business is expected to accelerate, with a year-on-year growth rate likely to exceed 20% [2] Profit Forecast and Investment Rating - The company has adjusted its profit expectations, forecasting revenues of 748.6 billion yuan, 840.3 billion yuan, and 923.6 billion yuan for 2025-2027 [2] - The projected NON-IFRS net profit for the same period is 257.8 billion yuan, 295.4 billion yuan, and 329.9 billion yuan, with corresponding EPS of 28, 32, and 36 yuan [2] - Based on the SOTP valuation method, the target market value for Tencent Holdings in 2026 is set at 6.5 trillion yuan, corresponding to a target price of 773 HKD, maintaining a "buy" rating [2]

Company Overview - The company continues to show strong performance in its gaming business, with robust growth in advertising, financial services, and enterprise services, indicating sustained high-quality growth [1][2]. Gaming Business - For Q3 2025, domestic game revenue is expected to maintain a rapid growth rate of 11% year-on-year, particularly in the shooting game sector, with notable daily active users (DAU) for titles like "Peacekeeper Elite" exceeding 33 million, "Delta Action" surpassing 30 million, and "Dark Zone Breakthrough" breaking 10 million [1]. - Internationally, the company anticipates a 25% year-on-year increase in overseas game revenue for Q3 2025, driven by the successful monetization of quality games from its subsidiary Supercell [1]. Advertising Growth - Advertising revenue is projected to grow by 19% year-on-year in Q3 2025, fueled by improvements in AI advertising efficiency, increased ad loads from video accounts, mini-programs, and search functionalities [1][2]. Financial Services - The company expects a combined revenue growth of over 20% year-on-year for lending and wealth management services in Q3 2025, alongside a recovery in commercial payment income [2]. - Overall, financial and enterprise services revenue is anticipated to grow by 11% year-on-year in Q3 2025, supported by increased cloud computing demand and optimization efforts [2]. AI Development - Recent advancements in AI models, such as the mixed Yuan image 3.0, indicate progress that can compete with leading closed-source models in the industry [2]. - Although AI investments have not yet reached the commercialization phase, the company maintains high-quality growth in other business areas, contributing to margin improvement [2]. Profitability Forecast - Adjusted operating profit is expected to increase by 18.5% year-on-year, while adjusted net profit is projected to rise by 12% in Q3 2025 [2]. Valuation and Target Price - The company maintains its revenue and profit forecasts for 2025/2026, with a rating of "outperform" and a target price of HKD 700, implying a 9.5% upside from the current stock price [2].

Group 1: Tencent - Tencent's mobile game revenue stabilized year-on-year in September, with strong performances from "Delta Action" and "Clash Royale" offsetting high base effects [1][2] - Domestic revenue decreased by 2.7 billion yuan (8%) year-on-year, primarily due to the high base from "MDnF," partially mitigated by new games like "Valorant: Source Action" and "Delta Action" [2] - "Delta Action" achieved a record high revenue of 1.5 billion yuan in September, driven by continuous user growth, with daily active users exceeding 30 million [2] - Overseas revenue increased by 670 million yuan (9%) year-on-year, mainly due to contributions from "Clash Royale," which saw a revenue of over 750 million yuan in September, reflecting a year-on-year increase of 360% [2] Group 2: NetEase - NetEase's domestic mobile game revenue slightly increased by 70 million yuan (1%) year-on-year, with new games like "Yanyun Sixteen Sounds" and "Egg Party" contributing to offset the high base from "Nirvana in Fire" [3] - Overseas revenue grew by 160 million yuan (18%) year-on-year, benefiting from new games such as "Destiny: Rising," which surpassed 100 million yuan in revenue in September [3] Group 3: Market Trends - Tencent is exploring interactive gaming, having released "The Queen's Game" on September 9, achieving cumulative sales of over 1 million [4] - By September 2025, 145 domestic game licenses and 11 import licenses are expected to be issued, with a focus on Tencent's open-world RPG "Return" and miHoYo's new game "Honkai: Origin Spirit" [4]

Investment Rating - The report maintains a "Buy" rating for Tencent Holdings [1][22][25] Core Insights - Strong advertising performance, sufficient growth momentum in gaming, and potential acceleration in cloud business are highlighted as key drivers for Tencent's growth [1][22] - The report anticipates Tencent's revenue for Q3 2025 to reach 188.6 billion RMB, representing a year-over-year growth of 13% [6][22] - The expected non-IFRS net profit for Q3 2025 is projected to be 67.9 billion RMB, a 13% increase year-over-year [6][22] Financial Performance Forecast 1. **Overall Performance**: - Revenue is expected to be 188.6 billion RMB in Q3 2025, with a gross margin of 56% and a gross profit of 105.1 billion RMB [6][22] - Non-IFRS operating profit is projected at 71.4 billion RMB, a 17% increase year-over-year [6][22] 2. **Gaming Segment**: - Anticipated revenue growth of 14% year-over-year, with domestic and overseas growth rates of 8% and 29% respectively [7][10][22] - Notable titles like "Delta Force" are expected to generate over 8 billion RMB in a single quarter [10][22] 3. **Marketing Services**: - Expected revenue growth of 22% year-over-year, driven by the WeChat ecosystem and strong performance in video accounts and mini-programs [14][22] - Video account advertising revenue is projected to grow over 60% year-over-year [14][22] 4. **Financial Technology and Enterprise Services**: - Revenue growth of 11% year-over-year is anticipated, with cloud services expected to exceed 20% growth [20][22] - The launch of "Tenpay Global" aims to enhance payment services in international markets [21][22] Earnings Forecast and Valuation - Revenue projections for Tencent from 2025 to 2027 are 748.6 billion RMB, 840.3 billion RMB, and 923.6 billion RMB respectively [22][23] - Non-IFRS net profit estimates for the same period are 257.8 billion RMB, 295.4 billion RMB, and 329.9 billion RMB [22][23] - The target market capitalization for Tencent in 2026 is set at 6.5 trillion RMB, corresponding to a target price of 773 HKD [22][23]

该行预期市场在腾讯第三季业绩中，关注AI应用与资本支出展望、基础与多模态AI模型能力的升级。 该行预测腾讯第三季收入及每股盈利同比升13%及18%，受高毛利收入来源及营运杠杆驱动。高盛上调 对腾讯今年至2027年资本支出预测至3,500亿元人民币，并上调云端收入增长预测。 高盛发布研报称，腾讯控股(00700)AI赋能其全体业务线，得益于其独特微信生态及全球游戏资产。该 行维持对腾讯"买入"评级，基本情境的目标价由701港元上调至770港元，此按综合方式作估值。而该行 对腾讯"牛市"情境的目标价846港元，对其"熊市"情境的目标价541港元。 腾讯今年以来股价累升56%，对比恒生科技指数44%，尽管投资者对美国关税及地缘政治风险的担忧再 度升温，高盛仍对腾讯持正面看法。虽然该股年内重新定价至2026年预期非国际财务报告准则市盈率19 倍，其估值仍相对全球同业折让，且拥相对低度变现化资产，具多项人工智能(AI)驱动变现化杠杆，以 及稳定股东回馈政策。 ...

Core Viewpoint - Tencent, currently the most valuable Chinese company, has experienced a significant stock price surge of 50.4%, indicating a potential turnaround in its market favor after a prolonged period of being out of favor [1]. Group 1: Company Performance - Tencent's stock price has surged by 50.4%, suggesting a recovery in investor sentiment and market performance [1]. Group 2: Investment Strategy - The investment approach focuses on companies with strong fundamentals, sustainable competitive advantages, and high long-term growth potential, emphasizing the importance of patience and strategic buying [1].

Key TakeawaysPresident Donald Trump's announcement of an additional 100% tariff on Chinese imports, effective November 1, has sent shockwaves through global markets, triggering a significant sell-off in cryptocurrencies and Asian equities.Hong Kong's Hang Seng Index is poised for sharp declines, with projections of a 2.5% drop at open, while major Chinese tech giants Alibaba (BABA) and Tencent (TCEHY) are expected to see sharp declines.China Vanke (2202.HK) shares are forecast to fall by as much as 4.6% fol ...

0700.HK 12m Price Target: HK$770.00 Price: HK$651.50 Upside: 18.2% With Tencent's 56% share price performance YTD (vs. HSTECH +44%) yet with renewed investor concerns around US tariffs/geopolitical risks, we re-assess risk-reward where we continue to see a positive skew with our refreshed base/bull/bear valuations of HK$770/$846/$541. While the stock has re-rated year-to-date to 19X 2026E non-IFRS P/E (16X ex-portfolio), we note still undemanding valuations at a discount vs. global peers (IFRS P/E 22X vs. M ...

Core Viewpoint - Tencent Holdings (00700) announced a share buyback plan, indicating confidence in its stock value and commitment to returning capital to shareholders [1] Group 1: Share Buyback Details - The company will repurchase 839,000 shares at a total cost of HKD 550 million [1] - The buyback price per share ranges from HKD 648 to HKD 669 [1]