Zhi Tong Cai Jing·2025-11-17 01:47Core Viewpoint - The report from Caitong Securities projects Tencent Holdings' Non-IFRS net profit to grow by 17.0%, 11.9%, and 10.3% from 2025 to 2027, reaching 260.6 billion, 291.5 billion, and 321.5 billion respectively, maintaining a "Buy" rating based on the current stock price corresponding to PE ratios of 21.0X, 18.8X, and 17.0X for the same years [1] Group 1: Financial Performance - In Q3 2025, Tencent achieved revenue of 192.9 billion (up 15.4% year-on-year, exceeding consensus expectations by 2.15%) with a gross margin of 56.4% (exceeding expectations by 0.19 percentage points) [2] - The sales expense ratio was 5.9% (exceeding expectations by 0.6 percentage points), while the R&D expense ratio was 11.8% (exceeding expectations by 0.9 percentage points) [2] - The share of profits from associates and joint ventures reached 7.85 billion (exceeding expectations of 6.23 billion), driving Non-IFRS net profit to 70.55 billion (up 18.0% year-on-year, exceeding expectations by 6.9%) [2] Group 2: Gaming Revenue - Gaming revenue was 63.6 billion (up 22.8% year-on-year, exceeding expectations by 5.2%), with domestic market revenue at 42.8 billion (up 14.8%, exceeding expectations by 1.3%) [3] - International market revenue reached 20.8 billion (up 43.4%, exceeding expectations by 14.8%), driven by increased revenue from games like "Clash Royale" and contributions from acquired game studios [3] Group 3: Advertising and Other Services - Advertising revenue was 36.24 billion (up 20.8% year-on-year, exceeding expectations by 1.8%), supported by increased ad spending across major industries and improved user engagement [4] - The gross margin for advertising was 56.7% (exceeding expectations by 0.5 percentage points), while the gross margin for financial technology and enterprise services was 50.2% (below expectations by 1.4 percentage points) [4]