Ge Long Hui·2025-11-16 03:49Performance Review - In Q3 2025, the company's revenue and Non-IFRS net profit exceeded expectations by 2% and 5% respectively, with revenue growing 15.4% to 192.9 billion yuan, surpassing both internal and market forecasts [1] - Non-IFRS net profit increased by 18% to 70.55 billion yuan, also exceeding expectations, primarily driven by better-than-expected joint venture income [1] Development Trends - Domestic gaming showed strong performance, while overseas gaming experienced accelerated growth, with Q3 2025 gaming revenue increasing by 23%, and overseas gaming revenue rising by 43% to 20.8 billion yuan, significantly exceeding expectations [1] - The game "Delta Action" contributed significantly to domestic revenue growth, achieving over 30 million daily active users in September [1] Advertising and Cloud Computing Growth - In Q3 2025, advertising revenue grew by 21% to 36.2 billion yuan, driven by increased ad load on platforms and AI-driven ad targeting improvements [2] - Financial services revenue increased by 8.4%, with commercial payments accelerating and high-margin businesses like consumer loans maintaining strong growth [2] Capital Expenditure and Profitability - Capital expenditure in Q3 2025 was 13 billion yuan, a 24% year-on-year decline, with the company lowering its full-year CAPEX guidance while maintaining that absolute values will still exceed 2024 levels [3] - Adjusted operating profit increased by 18.4%, and adjusted net profit rose by 18% in Q3 2025, reflecting effective AI investments and operational efficiencies [3] Earnings Forecast and Valuation - Based on strong gaming growth, the company raised its 2026 revenue forecast by 1% to 831.2 billion yuan, and adjusted Non-IFRS net profit forecasts for 2025 and 2026 upwards by 2% each [3] - The company maintains an "outperform" rating with a target price of 700 HKD, indicating a 7% upside potential from the current stock price [3]