Zhi Tong Cai Jing·2025-11-14 08:52Core Viewpoint - Cathay Securities maintains an "Overweight" rating on Tencent Holdings (00700), adjusting revenue estimates for 2025-2027 to 752.9/841.8/925.3 billion yuan, and net profit estimates to 261.9/301.8/338.3 billion yuan, with a target price of 785 HKD based on a 25x PE for 2025 [1] Group 1: Financial Performance - In Q3 2025, Tencent achieved revenue of 192.9 billion yuan, a year-on-year increase of 15.4% [2] - Adjusted operating profit was 72.6 billion yuan, up 18.4% year-on-year, with an operating profit margin of 37.6%, an increase of 1.0 percentage points [2] - Adjusted net profit reached 70.6 billion yuan, reflecting an 18.0% year-on-year growth, with a net profit margin of 36.6%, up 0.8 percentage points [2] - R&D expenditure was 22.8 billion yuan, with an R&D spending rate of 11.8%, up 1.1 percentage points year-on-year [2] - Capital expenditure decreased by 24.0% year-on-year to 13.0 billion yuan, while cash flow capital payments increased by 66.7% to 20.0 billion yuan [2] Group 2: Gaming Sector Performance - The value-added services segment generated revenue of 95.9 billion yuan, a year-on-year increase of 15.9%, with a gross margin of 61.2%, up 3.7 percentage points [3] - Domestic and overseas gaming revenues were 42.8 billion yuan and 20.8 billion yuan, reflecting year-on-year growth of 14.7% and 43.4%, respectively [3] - Notable game titles include "Delta Operation" ranking among the top three in industry revenue, and "Dying Light: The Beast" receiving "extremely positive" user ratings on Steam [3] Group 3: AI and Marketing Services - Marketing services revenue reached 36.2 billion yuan, a year-on-year increase of 20.8%, driven by improved user engagement and AI-driven advertising targeting [4] - The introduction of the Tencent Advertising AIM+ product matrix supports automated configuration for advertisers, enhancing ad creativity [4] - Financial technology services generated revenue of 58.2 billion yuan, with a year-on-year growth of 9.6%, supported by cloud service revenue and increased transaction volumes in WeChat stores [4]