Ge Long Hui·2025-11-19 11:50Core Insights - The company reported Q3 2025 revenue of 192.9 billion yuan, a year-on-year increase of 15%, exceeding Bloomberg consensus expectations of 188.8 billion yuan [1] - Non-IFRS net profit attributable to the parent company reached 70.6 billion yuan, up 18.0% year-on-year, also surpassing Bloomberg consensus [1] - Overall gross margin improved to 56%, up 2.6 percentage points year-on-year, with various business segments showing increased margins [1] Revenue Breakdown - Domestic and international gaming revenue exceeded expectations, with total online gaming revenue at 63.6 billion yuan, a year-on-year increase of 22.8% [2] - Domestic gaming market revenue was 42.8 billion yuan, up 15% year-on-year, benefiting from the success of "Delta Action" and growth in evergreen games [2] - International gaming market revenue reached 20.8 billion yuan, a 43% increase year-on-year, driven by growth from Supercell games and "PUBG MOBILE" [2] Advertising and AI Impact - Advertising revenue grew to 36.2 billion yuan, up 21% year-on-year, benefiting from increased ad exposure and AI-driven ECPM growth [2] - The company enhanced AI applications in advertising creation, delivery, recommendation, and performance analysis, leading to improved click-through and conversion rates [2] Profit Forecast and Investment Rating - The company is expected to maintain strong performance with adjusted net profit forecasts of 255.5 billion yuan, 285.8 billion yuan, and 318.2 billion yuan for 2025-2027 [3] - Corresponding PE ratios (Non-IFRS) are projected at 21, 19, and 17 times for 2025-2027 [3] - The company maintains a "buy" rating due to its solid business barriers and strong ecosystem across gaming, social platforms, advertising, and fintech [3]