TENCENT(HK:00700) Xin Lang Ke Ji·2025-11-13 13:52Core Insights - Tencent Holdings reported Q3 2025 revenue of 192.9 billion RMB, a year-on-year increase of 15% [1] - Profit attributable to equity holders was 63.1 billion RMB, up 19% year-on-year [1] - Non-IFRS profit attributable to equity holders reached 70.6 billion RMB, reflecting an 18% year-on-year growth [1] Financial Performance - Revenue for Q3 2025 was 192.9 billion RMB, marking a 15% increase compared to the previous year [1] - Profit attributable to equity holders was 63.1 billion RMB, which is a 19% increase year-on-year [1] - Non-IFRS profit attributable to equity holders was 70.6 billion RMB, showing an 18% growth from the previous year [1] Game Business Insights - The international gaming business has seen accelerated growth due to recent acquisitions and the success of the game "Dying Light: Beast" [3] - Future growth in the international gaming segment is expected to slow down, aligning closer to the basic growth trend [3] - The company plans to continue acquiring game studios and promoting self-developed games in global markets [3] Capital Expenditure - Capital expenditure for the quarter was approximately 51.3 billion RMB, with cash payments amounting to 20 billion RMB, indicating a timing difference in server-related expenses [4] - The company anticipates a 221% year-on-year increase in total capital expenditure for 2024, accounting for about 12% of revenue [4] - The updated guidance for 2025 indicates that capital expenditure as a percentage of revenue will be lower than previously expected, although the total amount will exceed that of 2024 [4] AI and Infrastructure Development - The company is actively recruiting top talent for its "Yuanbao" team and optimizing its infrastructure to enhance AI capabilities [4] - "Yuanbao" has been integrated into WeChat, providing various AI functionalities that enhance user experience and engagement [4] - The automated advertising solution AI Plus is expected to improve advertising effectiveness, particularly for small and medium-sized enterprises [5] Cost Management and Efficiency - The increase in sales, general, and administrative expenses, particularly in R&D, is linked to investments in AI [7] - AI investments are projected to enhance revenue and gross margin, with both metrics showing positive growth [7] - The company aims to leverage AI to create more value rather than solely focusing on cost reduction [7]