Ge Long Hui·2025-10-15 11:24Company 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].