Zhi Tong Cai Jing·2024-04-16 07:09Core Viewpoint - The report from CMB International maintains a "Buy" rating for Tencent Holdings (00700) while slightly lowering the total revenue forecast for 2024 to 2026 by 1% to 2%, primarily due to weaker gaming business performance. The target price is adjusted from HKD 450.5 to HKD 445 [1] Group 1: Financial Performance - Tencent is on track to improve profit margins, with high-margin business revenue contributions increasing and operational leverage improving [1] - The company commits to enhancing shareholder returns, estimating a 6% year-on-year revenue growth in Q1 to RMB 158.6 billion, with non-IFRS net profit expected to rise 31% year-on-year to RMB 43.1 billion, and gross margin improving by approximately 3 percentage points year-on-year [1] Group 2: Gaming and Social Network Services - The gaming business is expected to face short-term pressure, with Q1 revenue estimated to decline by 2% year-on-year, but a recovery in positive growth is anticipated in Q2 with the launch of new games [1] - Revenue from social network services is also estimated to decline by 2% year-on-year in Q1, mainly due to adjustments in Huya and music streaming services, although this decline is partially offset by stable growth in mini-game revenue [1]