Detailed discussion of risk factors and non-IR measures, please refer to our disclosure document on the IR section of our website. Now let me introduce the management team on webinar tonight. Our Chairman and CEO, Paul Nima, will kick off with a short overview. and contribution from new games with evergreen potential. We upgrade our e-commerce strategy around mini shops. and partners. Looking at our financial numbers for the quarter, total revenue was 167 billion RMB up 8% year-on-year and 4% quarter-on-qua ...

Investment Rating - The report maintains a "Buy" rating for Tencent Holdings (00700.HK) [2] Core Views - The company's business shows resilience with impressive growth in gaming and advertising sectors [2] - The WeChat ecosystem is thriving, with significant advancements in AI deployment and commercial capabilities [2] - The gaming segment continues to grow healthily, with both domestic and international revenues showing positive trends [2] - Advertising revenue, particularly from video accounts, is experiencing high growth rates [2] - Financial technology and enterprise services are stable, with potential for recovery in the future [2] Summary by Sections Performance Overview - In Q3 2024, Tencent reported revenue of 167.2 billion yuan, a year-on-year increase of 8%, and a NON-IFRS net profit of 59.8 billion yuan, up 33% year-on-year [2] Business Analysis - WeChat's mini-program transaction volume exceeded 2 trillion yuan, reflecting a growth of over 10% year-on-year [2] - The gaming revenue reached 51.8 billion yuan in Q3 2024, marking a 13% increase year-on-year, with domestic game revenue at 37.3 billion yuan, up 14% [2] - Advertising revenue was 30 billion yuan, growing 17% year-on-year, with video account ads increasing by over 60% [2] - Financial technology and enterprise services revenue reached 53.1 billion yuan, a 2% increase year-on-year [2] Financial Forecasts and Valuation - Projected NON-IFRS net profits for 2024, 2025, and 2026 are 222.5 billion yuan, 252.6 billion yuan, and 275.2 billion yuan respectively [2] - The current stock price corresponds to a PE ratio of 15.57 for 2024, 13.71 for 2025, and 12.58 for 2026 [2]

EnglishItalianoEspañolPortuguêsDeutschالعربيةFrançaisImportant DisclaimersThe content provided on the website includes general news and publications, our personal analysis and opinions, and contents provided by third parties, which are intended for educational and research purposes only. It does not constitute, and should not be read as, any recommendation or advice to take any action whatsoever, including to make any investment or buy any product. When making any financial decision, you should perform your ...

Investment Rating - The report maintains a BUY rating for Tencent with a target price of HK$525.0, representing a 30% upside from the current price of HK$403.80 [3][7]. Core Insights - Tencent's total revenue for 3Q24 increased by 8% YoY to RMB167.2 billion, aligning with consensus estimates. Non-IFRS operating profit grew by 19% YoY to RMB61.3 billion, also in line with expectations. The company anticipates continued earnings growth in 4Q24, driven by accelerating game revenue and resilient marketing performance [1][2]. - Game revenue growth accelerated in the second half of 2024, with a 13% YoY increase to RMB51.8 billion in 3Q24. Domestic game revenue rose by 14% YoY, primarily due to strong performance from DnF Mobile, while international game revenue grew by 9% YoY [1][2]. - Marketing services revenue showed solid momentum, increasing by 17% YoY to RMB30.0 billion in 3Q24, driven by strong demand for Video Accounts, Mini Programs, and Weixin Search [1][2]. - The Fintech and Business Services (FBS) segment experienced a 2% YoY revenue growth to RMB53.1 billion in 3Q24, reflecting a deceleration due to soft consumption sentiment [1][2]. Financial Summary - For FY24E, Tencent's revenue is projected to reach RMB655.999 billion, with an adjusted net profit of RMB224.394 billion and an adjusted EPS of RMB23.17 [2][4][17]. - Gross margin is expected to improve from 48.1% in FY23A to 53.2% in FY24E, with operating margin increasing from 32.0% to 32.8% [2][4][17]. - The adjusted net profit forecast for FY25E is RMB241.929 billion, with an adjusted EPS of RMB24.98 [2][4][17]. Valuation Breakdown - The SOTP-derived target price of HK$525.0 includes valuations for various segments: HK$202.9 for online games, HK$30.4 for SNS, HK$102.6 for marketing services, HK$84.5 for fintech, HK$22.6 for cloud, and HK$68.8 for strategic investments [7][8][9][10][11]. - The valuation reflects Tencent's strong market position and growth potential across its diverse business segments [7][8][9][10][11]. Peer Comparison - Tencent's valuation metrics are competitive within the online games and advertising sectors, with an average PE of 18x for online games and 19x for marketing services compared to its peers [13][14]. - The report highlights Tencent's leadership in the digital payment market and its potential for growth in fintech, supported by a premium valuation compared to industry averages [10][14].

Financial Data and Key Metrics - Total revenue for Q3 2024 was RMB 167 billion, up 8% YoY and 4% QoQ [8] - Gross profit was RMB 89 billion, up 16% YoY and 3% QoQ [8] - Non-IFRS operating profit was RMB 61 billion, up 19% YoY and 5% QoQ [8] - Diluted EPS was RMB 6.34, up 36% YoY [40] - Free cash flow was RMB 58.5 billion, up 14% YoY [45] Business Line Data and Key Metrics - Value-Added Services (VAS) revenue was RMB 83 billion, up 9% YoY, with social networks contributing RMB 31 billion, up 4% YoY [14] - Domestic games revenue grew 14% YoY to RMB 37 billion, driven by titles like Honour of Kings and Peacekeeper Elite [15] - International games revenue increased 9% YoY to RMB 15 billion, with PUBG Mobile and Brawl Stars performing well [16] - Marketing Services revenue grew 17% YoY, with video accounts marketing services revenue increasing over 60% YoY [29][31] - FinTech and Business Services revenue was RMB 53 billion, up 2% YoY [33] Market Data and Key Metrics - Combined MAU of WeChat and QQ grew to 1.38 billion, with QQ mobile MAU resuming YoY growth to 562 million [9] - Mini Programs facilitated over RMB 2 trillion in GMV in Q3 2024, driven by use cases like food ordering and medical services [17] - International cloud revenue increased significantly YoY, leveraging competitive pricing and domain expertise in gaming and live streaming [36] Company Strategy and Industry Competition - The company upgraded its e-commerce strategy around Mini Shops to create a unified transaction experience within the Weixin ecosystem [7] - AI deployment across products and operations, including marketing services and cloud, is yielding tangible benefits [7] - The company continues to invest in AI technology, tools, and solutions to assist users and partners [7] - The strategy for games focuses on leveraging both in-house studios and external partnerships to create evergreen titles [53][54] Management Commentary on Operating Environment and Future Outlook - Management highlighted the robust performance of evergreen games and the potential of new titles like DnF Mobile and Delta Force [6][10] - The company is optimistic about the long-term potential of its e-commerce ecosystem, particularly with the upgrade to Mini Shops [59][60] - Management is constructive on the outlook for international games revenue growth, given the deferred revenue backlog and potential from new releases [70] Other Important Information - The company introduced Tencent Hunyuan Turbo, which doubles training and inference efficiency and halves inference costs compared to its predecessor [35] - GPU-powered services now represent a teens percentage of the company's infrastructure as a service revenue [34] - The company made its Hunyuan large model and 3D generation models available on an open-source basis [36] Q&A Session Summary Question: Implications of major hit games on the industry and Tencent's game strategy - The success of games like Black Myth Wukong and Whiteout Survival reflects a structural trend facilitated by China's large home market and engineering workforce [50][51] - Tencent's strategy focuses on leveraging both in-house studios and external partnerships to create evergreen titles [53][54] Question: Upgrade to Weixin Mini Shops and its potential - The upgrade aims to create a unified and trustworthy e-commerce platform within Weixin, improving the shopping experience for consumers and providing better transaction support for merchants [56][57] - The potential is significant, with Mini Programs already facilitating RMB 2 trillion in GMV, primarily in services [60] Question: Weixin Search and international games deferred revenue - Weixin Search saw commercial queries increase and click-through rates improve, with search revenue more than doubling YoY [32][66] - The elongation of deferred revenue periods for international games is primarily for flagship titles, with deferral periods typically six to nine months or longer [70] Question: Macroeconomic environment and positioning - Management is encouraged by recent pro-growth policies in China and is constructive on the long-term economic outlook [73][74] - The company focuses on compliance, product improvement, and cost efficiency to navigate the evolving regulatory and macroeconomic environment [75][76] Question: Near-term focus for Weixin e-commerce and collaboration with Taobao - The near-term focus is on improving the infrastructure and functionalities of Mini Shops, with growth expected to follow [83][84] - The collaboration with Taobao has seen good adoption of Weixin Pay, benefiting both companies [85] Question: Delta Force monetization and payment revenue decline - Delta Force is monetizing well, with the majority of revenue generated on PC, despite the majority of users being on mobile [90][91] - The decline in payment revenue is due to the elimination of lower-quality transactions and a focus on smaller ticket everyday items [92][93] Question: Earnings growth outlook and share buyback - The company does not have a specific target for earnings growth but aims to achieve operating leverage from revenue growth [95][96] - Share buybacks for 2024 are expected to exceed the RMB 100 billion target, with plans for 2025 to be shared at the year-end earnings announcement [97][98] Question: AI-related revenue and Hunyuan monetization - AI is driving significant benefits in content recommendation and ad targeting, with GPU-powered services contributing to infrastructure as a service revenue [101][102] - The company is testing Hunyuan across various products and services, with more use cases expected to scale in the coming quarters [105][106] Question: Game preferences and FinTech strategy - Younger users in China disproportionately favor first-person action games, with titles like VALORANT and Delta Force performing well [109][110] - The company is focusing on wealth management, particularly money market funds, and is cautious on lending due to macroeconomic conditions [114][116] Question: Game business adjustments and advertising outlook - Adjustments to game teams, such as Honour of Kings and Peacekeeper Elite, have been productive, with both games registering good growth [120][121] - The advertising business is expected to continue outperforming peers, driven by ad tech enhancements and increased ad load in video accounts [129][131] Question: Collaboration with Taobao and future partnerships - The collaboration with Taobao benefits users, Tencent, and Taobao, with significant work done to ensure a good user experience and compliance [134][135] - The company is open to future collaborations that make sense and are safe for users and content partners [138]

Financial Data and Key Metrics - Total revenue for Q3 2024 was RMB 1671.93 billion, an 8% YoY growth [3] - Return on investment was 4% for the quarter [3] - Gross margin increased from 49% to 53% YoY [15] - VAS (Value-Added Services) revenue grew 9% YoY to RMB 827 billion [15] - International games revenue increased 9% YoY to RMB 145 billion [15] - Domestic games revenue grew 14% YoY to RMB 373 billion [15] Business Line Performance - Game business achieved strong income growth, driven by long-term tree games and new game launches [3] - WeChat and WeChat reached 13.82 billion users, while QQ Mobile reached 5.62 billion users [4] - Music subscription revenue grew 20% YoY, with 119 million subscribers [6] - Long video subscription revenue increased 4% YoY, with total video subscriptions reaching 116 million [6] - Mini programs achieved GMV exceeding RMB 2 trillion [7] Market Performance - International games revenue growth lagged behind total revenue growth due to extended revenue deferral periods [15] - PUBG Mobile and Brawl Stars drove strong performance in international markets [7] - Domestic games like Peacekeeper Elite and Valorant set new revenue records [6] Strategy and Industry Competition - Company is upgrading its e-commerce strategy through the WeChat ecosystem [3] - Continued investment in AI technology, tools, and solutions to enhance user and partner experiences [3] - Focus on developing long-term tree games and identifying new games with potential [18] - Emphasis on standardizing and indexing the WeChat Shop platform to improve user experience [19] Management Commentary on Operating Environment and Future Outlook - Management remains optimistic about the long-term economic outlook despite current challenges [26] - Company is actively adapting to regulatory changes and focusing on compliance [27] - AI is seen as a key driver for future growth, particularly in content recommendation and advertising [37] - Company is cautious in its lending practices and selective in its loan approvals [44] Other Important Information - Company launched two new games, DNA mobile game and Delta Force, which show potential to become long-term games [4] - WeChat Shop is being integrated into the WeChat ecosystem, with a focus on improving logistics and customer service [19] - Company is leveraging its expertise in gaming and live streaming to strengthen its cloud services [4] Q&A Summary Question: Impact of macro environment on business strategy - Company remains optimistic about long-term economic growth and is focused on executing its current strategy [26][27] Question: Future of gaming industry and company's strategy - Company sees a structural trend in the success of Chinese games globally and is investing in new tools and technologies [17][18] Question: E-commerce strategy and WeChat Shop - Company aims to build a unified and trustworthy e-commerce experience through WeChat Shop, with a focus on standardization and indexing [19][20] Question: AI integration and revenue potential - AI is expected to significantly enhance content recommendation and advertising efficiency, with substantial revenue potential [37][38] Question: Payment and wealth management strategy - Company is cautious in its lending practices and is focusing on building a robust wealth management platform [43][44] Question: Advertising and video integration - Video integration is a key driver for advertising growth, with potential for further ad load rate increases [48][49] Question: Collaboration with Taobao - Collaboration with Taobao is seen as beneficial for users and both companies, with a focus on compliance and user experience [50][51]

Core Insights - Tencent reported a profit attributable to shareholders of 53.23 billion yuan ($7.37 billion) in the third quarter, exceeding the LSEG estimate of 46.18 billion yuan [1] - The company's revenue for the third quarter was 167.19 billion yuan, slightly below the analyst forecast of 167.82 billion yuan [2] Group 1 - The profit growth was driven by increases in gaming, advertising, and cloud services [1] - Tencent is recognized as a leading player in the gaming industry and is the parent company of WeChat, a major social messaging app in China [1]

Revenue and Profit Growth - Revenue for Q3 2024 reached RMB 167.193 billion, an 8% YoY increase[1] - Net profit attributable to equity holders surged 47% YoY to RMB 53.230 billion in Q3 2024[1] - Operating profit increased 20% YoY to RMB 53.333 billion in Q3 2024[1] - Revenue for Q3 2024 increased by 8% YoY to RMB 167.2 billion, with value-added services growing by 9% to RMB 82.7 billion, marketing services by 17% to RMB 30.0 billion, and fintech and business services by 2% to RMB 53.1 billion[8] - Net profit attributable to equity holders of the company grew by 47% YoY to RMB 53.2 billion, with non-IFRS net profit increasing by 33% to RMB 59.8 billion[13] - Revenue for Q3 2024 increased by 4% quarter-over-quarter to RMB 167.2 billion, with value-added services revenue growing by 5% to RMB 82.7 billion[15] - Net profit attributable to equity holders of the company rose by 12% quarter-over-quarter to RMB 53.2 billion, with non-IFRS net profit increasing by 4% to RMB 59.8 billion[17] - Revenue for the nine months ended September 30, 2024, was RMB 487,811 million, with value-added services contributing RMB 240,146 million and fintech and business services contributing RMB 155,831 million[33] - Net profit for the nine months ended September 30, 2024, was RMB 145,000 million, up from RMB 90,198 million in the same period of 2023[33] - Net profit for the nine months ended September 30, 2024, was RMB 145,000 million, a significant increase from RMB 90,198 million in the same period last year[35] - The company's profit attributable to equity holders for the nine months ended September 30, 2024, was RMB 142,749 million, a significant increase from RMB 88,191 million in the same period in 2023[66] User and Subscription Growth - WeChat and WeChat combined MAUs grew 3% YoY to 1.382 billion in Q3 2024[3] - Mini Program transaction volume exceeded RMB 2 trillion in Q3 2024, with double-digit YoY growth[4] - Music paid subscriptions increased 16% YoY to 119 million in Q3 2024[5] - Video paid memberships grew 6% YoY to 116 million in Q3 2024[5] Gaming Performance - International game VALORANT revenue increased over 30% YoY in Q3 2024[5] - International market gaming revenue grew by 5% to RMB 14.5 billion, driven by games like *PUBG MOBILE*, while domestic market gaming revenue increased by 8% to RMB 37.3 billion, supported by games like *Peacekeeper Elite* and *Dungeon & Fighter: Origin*[15] - Local market games refer to the company's gaming business in the Chinese market (excluding Hong Kong, Macau, and Taiwan)[103] - International market games refer to the company's gaming business outside the local market[103] - The company's gaming business includes titles such as PUBG (PlayerUnknown's Battlegrounds)[104] Gross Profit and Margin - Gross profit margin expanded to 53.1% in Q3 2024, up from 49.5% in Q3 2023[1] - Gross profit for Q3 2024 rose by 16% YoY to RMB 88.8 billion, with the gross margin improving from 49% to 53%[10] - Value-added services gross profit increased by 13% YoY to RMB 47.5 billion, with the gross margin improving from 56% to 57%[10] - Marketing services gross profit grew by 18% YoY to RMB 15.9 billion, with the gross margin slightly improving from 52% to 53%[11] - Fintech and business services gross profit surged by 19% YoY to RMB 25.4 billion, with the gross margin improving significantly from 41% to 48%[12] - Gross profit for Q3 2024 increased by 3% to RMB 88.8 billion, with a stable gross margin of 53%[15] - Gross profit for the nine months ended September 30, 2024, was RMB 258,593 million, with a gross margin of 53%[33] Expenses and Costs - Sales and marketing expenses increased by 19% YoY to RMB 9.4 billion, accounting for 6% of revenue compared to 5% in the same period last year[12] - General and administrative expenses rose by 11% YoY to RMB 29.1 billion, driven by increased R&D and employee costs[12] - Sales and marketing expenses grew by 3% to RMB 9.4 billion, while general and administrative expenses increased by 6% to RMB 29.1 billion, driven by higher R&D and employee costs[16] - Employee benefits expenses for the three months ended September 30, 2024, were RMB 29,636 million, compared to RMB 27,812 million in the same period in 2023[50] - Content costs (excluding intangible asset amortization) for the three months ended September 30, 2024, were RMB 17,232 million, compared to RMB 15,812 million in the same period in 2023[50] - Promotion and advertising expenses for the three months ended September 30, 2024, were RMB 6,659 million, compared to RMB 4,981 million in the same period in 2023[50] - R&D expenses for the three months and nine months ended September 30, 2024, were RMB 17.89 billion and RMB 50.845 billion, respectively, compared to RMB 16.454 billion and RMB 47.645 billion for the same periods in 2023[52] - Employee benefits expenses for the three months and nine months ended September 30, 2024, were RMB 14.5 billion and RMB 41.668 billion, respectively, compared to RMB 13.667 billion and RMB 39.951 billion for the same periods in 2023[52] - Media content amortization for the three months and nine months ended September 30, 2024, was RMB 6.584 billion and RMB 19.286 billion, respectively, compared to RMB 6.473 billion and RMB 22.864 billion for the same periods in 2023[53] - Intangible assets amortization related to acquisitions for the three months and nine months ended September 30, 2024, was RMB 1.324 billion and RMB 3.878 billion, respectively, compared to RMB 1.434 billion and RMB 3.455 billion for the same periods in 2023[53] - SSV and CPP related expenses (excluding share-based compensation) for the three months and nine months ended September 30, 2024, were RMB 240 million and RMB 550 million, respectively, compared to RMB 231 million and RMB 561 million for the same periods in 2023[53] - Non-recurring compliance-related costs and litigation settlement expenses for the nine months ended September 30, 2024, were RMB 3 million, compared to RMB 17 million for the same period in 2023[54] - Subsidies and tax refunds for the three months and nine months ended September 30, 2024, were RMB 2.631 billion and RMB 6.048 billion, respectively, compared to RMB 2.546 billion and RMB 8.14 billion for the same periods in 2023[55] - The company's total employee compensation cost for the three months ended September 30, 2024, was RMB 29.6 billion, compared to RMB 27.8 billion in the same period last year[95] Investments and Financial Assets - Share of profits from associates and joint ventures increased to RMB 6.0 billion in Q3 2024, up from RMB 2.1 billion in the same period last year[13] - The fair value of the company's equity interests in listed investee companies (excluding subsidiaries) as of September 30, 2024, was RMB 612,500 million[31] - The company's equity interests in unlisted investee companies (excluding subsidiaries) had a carrying value of RMB 327,700 million as of September 30, 2024[31] - The company's investment in associates as of September 30, 2024, was RMB 266,057 million, up from RMB 253,696 million as of December 31, 2023[70] - The fair value of the company's investment in listed associates as of September 30, 2024, was RMB 341.464 billion, compared to RMB 351.594 billion as of December 31, 2023[70] - The company's investment in associates increased by RMB 2,242 million in the first nine months of 2024, compared to RMB 6,301 million in the same period in 2023[71] - The company recognized a significant impairment provision of RMB 7,831 million for investments in associates with signs of impairment in the first nine months of 2024, compared to RMB 1,396 million in the same period in 2023[72] - The fair value of financial assets measured at fair value through profit or loss decreased to RMB 218,973 million as of September 30, 2024, from RMB 226,048 million as of December 31, 2023[73] - The company made new and additional investments totaling RMB 42,572 million in financial investments, investment companies, and others in the first nine months of 2024[75] - The fair value of financial assets measured at fair value through other comprehensive income increased to RMB 285,764 million as of September 30, 2024, from RMB 213,951 million as of December 31, 2023[76] - The company made new and additional investments totaling RMB 4,864 million in investment companies primarily engaged in social media platforms, sports equipment, e-commerce, and other internet-related businesses in the first nine months of 2024[78] - Net gains from disposal and deemed disposal of investments for the nine months ended September 30, 2024, were RMB 10.621 billion, compared to RMB 3.929 billion for the same period in 2023[56] - Fair value gains/(losses) on financial assets measured at fair value through profit or loss for the three months and nine months ended September 30, 2024, were RMB 3.788 billion and RMB 1.565 billion, respectively, compared to RMB 2.258 billion and RMB -754 million for the same periods in 2023[56] Cash Flow and Financial Position - EBITDA for Q3 2024 was RMB 64.4 billion, up from RMB 62.9 billion in Q2 2024, with adjusted EBITDA reaching RMB 69.7 billion[18] - Net cash position as of September 30, 2024, was RMB 95.5 billion, a significant increase from RMB 71.8 billion at the end of Q2 2024[18] - Capital expenditures for Q3 2024 were RMB 17.1 billion, nearly double the RMB 8.7 billion spent in Q2 2024[18] - Free cash flow generated in Q3 2024 was RMB 58,500 million, driven by net cash from operating activities of RMB 78,100 million, partially offset by capital expenditures of RMB 12,000 million[31] - The company's cash and cash equivalents as of September 30, 2024, were RMB 145,468 million, with a net cash position of RMB 95,462 million, up from RMB 71,757 million as of June 30, 2024[30] - Net cash flow from operating activities for the nine months ended September 30, 2024, was RMB 204.475 billion, an increase from RMB 168.008 billion in the same period in 2023[41] - Net cash used in investing activities for the nine months ended September 30, 2024, was RMB 79.243 billion, a decrease from RMB 117.157 billion in the same period in 2023[41] - Net cash used in financing activities for the nine months ended September 30, 2024, was RMB 151.330 billion, an increase from RMB 62.806 billion in the same period in 2023[41] - Cash and cash equivalents at the end of the period were RMB 145.468 billion, compared to RMB 146.476 billion at the end of the same period in 2023[41] Non-IFRS Metrics - Non-IFRS operating profit for Q3 2024 was RMB 61,274 million, up from RMB 53,333 million reported under IFRS[23] - Non-IFRS net profit attributable to equity holders for Q3 2024 was RMB 59,813 million, compared to RMB 53,230 million under IFRS[23] - Non-IFRS operating profit margin for Q3 2024 was 37%, up from 32% under IFRS[23] - Non-IFRS operating profit for Q2 2024 was RMB 58,443 million, up from RMB 50,732 million reported under IFRS[25] - Non-IFRS net profit attributable to equity holders for Q2 2024 was RMB 57,313 million, compared to RMB 47,630 million under IFRS[25] - Non-IFRS operating profit margin for Q2 2024 was 36%, up from 31% under IFRS[25] - Non-IFRS operating profit for the first nine months of 2024 was RMB 178,336 million, up from RMB 156,621 million reported under IFRS[27] - Non-IFRS net profit attributable to equity holders for the first nine months of 2024 was RMB 167,391 million, compared to RMB 142,749 million under IFRS[27] - Non-IFRS operating profit margin for the first nine months of 2024 was 37%, up from 32% under IFRS[27] Earnings Per Share and Dividends - Basic earnings per share for the nine months ended September 30, 2024, were RMB 15.346, compared to RMB 9.312 in the same period of 2023[33] - Basic earnings per share for the nine months ended September 30, 2024, were RMB 15.346, up from RMB 9.312 in the same period in 2023[66] - Diluted earnings per share for the nine months ended September 30, 2024, were RMB 15.008, compared to RMB 9.075 in the same period in 2023[68] - The company paid a final dividend of HKD 31.743 billion for the year ended December 31, 2023, an increase from HKD 22.762 billion in the previous year[69] Assets and Liabilities - Property, plant, and equipment increased to RMB 69,583 million as of September 30, 2024, from RMB 53,232 million as of December 31, 2023[36] - Intangible assets slightly increased to RMB 178,773 million as of September 30, 2024, from RMB 177,727 million as of December 31, 2023[36] - Investments in associates and joint ventures increased to RMB 266,057 million as of September 30, 2024, from RMB 253,696 million as of December 31, 2023[36] - Total assets increased to RMB 1,723,357 million as of September 30, 2024, from RMB 1,577,246 million as of December 31, 2023[36] - Total equity attributable to equity holders of the company increased to RMB 912,586 million as of September 30, 2024, from RMB 808,591 million as of December 31, 2023[38] - Non-current liabilities decreased to RMB 335,073 million as of September 30, 2024, from RMB 351,408 million as of December 31, 2023[38] - Current liabilities increased to RMB 407,777 million as of September 30, 2024, from RMB 352,157 million as of December 31, 2023[38] - Total equity as of September 30, 2024, amounted to RMB 980.507 billion, an increase from RMB 873.681 billion at the beginning of the year[39] - Retained earnings increased to RMB 861.819 billion, up from RMB 813.911 billion at the start of the year[39] - Comprehensive income for the period was RMB 209.832 billion, driven by a net profit of RMB 142.749 billion and other comprehensive income of RMB 62.806 billion[39] - The company repurchased shares worth RMB 13.681 billion, which were subsequently canceled[39] - Cash dividends paid during the period totaled RMB 68.797 billion[39] - Non-controlling interests increased to RMB 67.921 billion, up from RMB 65.090 billion at the beginning of the year[39] - The company recorded a gain of RMB 72.902 billion from the fair value changes of financial assets measured at fair value through other comprehensive income[39] - Foreign currency translation differences resulted in a loss of RMB 7.064 billion[39] - The company allocated RMB 28.924 billion to statutory reserves[39] - The company's equity attributable to shareholders increased to RMB 912.586 billion, up from RMB 808.591 billion at the start of the year[39] - Total equity as of January 1, 2023, was RMB 782.86 billion, with retained earnings of RMB 705.981 billion[40] - Comprehensive income for the period was RMB 90.198 billion, with a net profit of RMB 88.191 billion[40] Employee and Compensation - The company had 108,823 employees as of September 30, 2024, an increase from 105,309 employees as of September 30, 2023[95] - The company's total employee compensation cost for the three months ended September 30, 2024, was RMB 29.6 billion, compared to RMB 27.8 billion in the same period last year[95] Debt and Notes Payable - The non-current portion of long-term USD notes payable was RMB 127.

Group 1 - Proactive provides fast, accessible, informative, and actionable business and finance news content to a global investment audience [2][3] - The news team covers various sectors including biotech, pharma, mining, natural resources, battery metals, oil and gas, crypto, and emerging technologies [3] - Proactive has a presence in key finance and investing hubs with bureaus and studios located in major cities such as London, New York, and Sydney [2] Group 2 - The company utilizes technology to enhance workflows and has adopted automation and software tools, including generative AI, while ensuring all content is edited and authored by humans [4]

Investment Rating - The report does not explicitly mention an investment rating for the company [1] Core Views - Tencent Holdings (700) is expected to announce its Q3 2024 financial results on November 13, 2024, with a subsequent earnings call at 20:00 Beijing time [1] - Visible Alpha consensus estimates Q3 2024 revenue at 167 billion RMB, an 8% YoY increase [1] - Value-added services are expected to contribute 82.3 billion RMB, up 8.71% YoY [1] - Advertising revenue is projected to rise 15.18% YoY to 29.6 billion RMB, driven by video accounts [1] - Cloud and fintech revenues are anticipated to reach 53.5 billion RMB, a 2.75% YoY increase [1] - Non-GAAP net profit is forecasted to grow 19.55% YoY to approximately 53.7 billion RMB [1] Revenue Breakdown - Value-added services: 82.3 billion RMB, +8.71% YoY [1] - Advertising: 29.6 billion RMB, +15.18% YoY [1] - Cloud and fintech: 53.5 billion RMB, +2.75% YoY [1] Gaming Segment - Tencent's evergreen gaming strategy continues to drive growth, with AI enhancing monetization efficiency [1] - Domestic games like Peacekeeper Elite maintain 100 million users, while DNF remains stable on the game bestseller list [1] - Overseas games, including the overseas version of Honor of Kings, performed well, ranking in the top three on Sensor Tower's China mobile game overseas market download list in July [1] - New game Delta Action reached 25 million registered users within a week of its launch in late September [1] Advertising Business - Advertising revenue is expected to benefit from the rapid development and operational optimization of video accounts [1] - AI technology is enhancing the efficiency of Tencent's advertising 3.0 platform, supporting high gross margins in the advertising business [1] Cloud and Fintech - Cloud business is focusing on operational efficiency and cost reduction while pursuing high-quality growth [1] - Fintech is expected to see increased demand due to the rising market environment for large models and the commercialization progress of projects like mini-programs [1] - The interconnection between WeChat Pay and Taobao Tmall starting in September is anticipated to significantly boost Q4 2024 and 2025 technical service fees [1] Overall Outlook - The company's overall revenue is expected to improve, with continued cost reduction and efficiency improvements [1] - Sales and management expense ratios are lower than expected, with promising data from video accounts anticipated [1] - Management is expected to provide further insights during the earnings call regarding new game releases and future commercialization strategies [1]