Zhi Tong Cai Jing·2025-08-14 01:28Core Viewpoint - CICC has raised its revenue forecasts for Tencent Holdings (00700) for 2025 and 2026 by 2% and 4% respectively, citing rapid growth across various business segments, while maintaining Non-IFRS net profit estimates unchanged [1] Group 1: Financial Performance - Tencent's Q2 2025 revenue increased by 14.5% year-on-year to 184.5 billion yuan, exceeding CICC's expectations by 3.5% and market expectations by 3.1% [2] - Non-IFRS net profit for Q2 2025 rose by 10% to 63.05 billion yuan, aligning closely with CICC's estimates and surpassing market expectations by 1.6% [2] - The company’s gross margin improved by 3.6 percentage points year-on-year, with VAS, advertising, and FBS business margins increasing by 3.4, 2, and 4.5 percentage points respectively [5] Group 2: Business Segments - The advertising business saw a 20% year-on-year revenue increase to 35.8 billion yuan, driven by AI applications in ad creation, placement, and analysis, leading to increased demand for video accounts, mini-programs, and WeChat search ads [3] - Q2 2025 game revenue grew by 22% year-on-year to 59.2 billion yuan, surpassing CICC's and market expectations by 5% [4] - Financial and enterprise services revenue increased by 10% year-on-year to 55.5 billion yuan, with financial technology revenue growing by 8% [4] Group 3: Future Outlook - CICC expects continued strong growth in Tencent's game revenue in the second half of 2025, supported by the performance of existing games and the upcoming launch of new titles [4] - The target price for Tencent has been raised by 17% to 700 HKD, reflecting a shift in valuation to 2026 with a corresponding 20x Non-IFRS P/E ratio, indicating a 19% upside potential [1]