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]

Core Viewpoint - Tencent is experiencing a significant decline in its stock price due to investor concerns over the effectiveness of China's economic stimulus measures, leading to skepticism in the market [1][2] Group 1: Stock Performance - Tencent's share price has dropped by 8.9% to $56.80, remaining approximately 42% below its peak despite some recovery from earlier stimulus-driven gains [1] - The company reported a revenue growth of 8% and a substantial operating income improvement of 27% year-over-year in the latest quarter [1] Group 2: Valuation and Market Position - Tencent currently trades at a price-to-earnings (P/E) ratio of 25.76, with its GF Value score indicating it is fairly valued [2] - The company holds a robust position in the global internet sector, particularly in gaming and social media, which underscores its potential for future growth [2] Group 3: External Pressures - Tencent faces external pressures from macroeconomic conditions and geopolitical tensions, particularly between the U.S. and China, which have deterred U.S. institutional investors [2] - The stock performance of Tencent will remain sensitive to external political and economic factors [2]

Group 1 - Tencent's stock is experiencing significant volatility, with a decline of 8.4% in a single trading session due to uncertainty surrounding China's economic stimulus plans [1][2] - Chinese economic officials have indicated a shift of $28.36 billion from the 2025 budget to support infrastructure projects this year, but investors were expecting more substantial measures [2] - The overall sentiment in the market is negative as investors are skeptical about the extent of future economic support, leading to sell-offs in Tencent and other Chinese stocks [2][3] Group 2 - Despite recent gains from government stimulus, Tencent's stock remains approximately 42% lower than its peak [3] - The company reported year-over-year revenue growth of 8% and operating income growth of 27% in its latest quarter [3] - Tencent's current trading valuation is around 18 times its earnings over the trailing 12 months, which is considered relatively cheap for a company with strong long-term growth potential [3] Group 3 - Geopolitical risks, particularly rising tensions between the U.S. and China, are influencing investor behavior, leading to reduced positions in Chinese companies by U.S. institutional investors [4] - Continued deterioration in U.S.-China relations could exert additional pressure on Chinese stocks, including Tencent [4]

Group 1 - Shares of Ubisoft increased by over 30% following reports of Tencent and the Guillemot family considering a buyout of the company [1][2] - Ubisoft's shares surged 33.5% to approximately $15.57, as reported by FactSet [1] - The company has experienced a significant decline in market value, losing more than half of it this year [1] Group 2 - Ubisoft is known for popular franchises such as "Assassin's Creed" [2] - The company's shares fell to their lowest point in over a decade due to the underperformance of its latest title "Star Wars Outlaws" and the delay of a new "Assassin's Creed" game [2] - CEO Yves Guillemot acknowledged that the company's second quarter performance did not meet expectations [2]

Group 1 - The articles focus on community guidelines aimed at fostering respectful and constructive conversations among users [1][2] - Key rules include prohibiting false information, spam, and abusive language to maintain a civil environment [1] - User accounts may be blocked for repeated violations or discriminatory comments, emphasizing the importance of community protection [2]