TENCENT(00700) 国泰君安·2024-07-17 01:31Investment Rating - The report maintains a "Buy" rating for Tencent Holdings with a target price of 462 HKD for 2024 [24][11]. Core Insights - The report highlights that Tencent's gaming and advertising sectors are expected to grow well, leading to continuous improvement in profitability. The anticipated revenue for FY24Q2 is 160.4 billion RMB, representing a year-on-year growth of 7.5% [28][23]. - The gaming business is recovering, with projected revenue of 46.5 billion RMB for FY24Q2, a year-on-year increase of 4.6%. Domestic game revenue is expected to be 33.1 billion RMB, while overseas game revenue is projected at 13.5 billion RMB [12][28]. - The advertising sector is expected to see significant growth, with network advertising revenue projected to reach 30.8 billion RMB in FY24Q2, a year-on-year increase of 23% [13][28]. Summary by Sections Financial Forecasts and Valuation - Adjusted revenue forecasts for FY2024 and FY2025 are set at 654.3 billion RMB and 703.7 billion RMB, respectively, with year-on-year growth rates of 7.4% and 7.5%. Adjusted net profit for FY2024 and FY2025 is projected at 197.2 billion RMB and 222.5 billion RMB, reflecting year-on-year growth of 25.0% and 12.9% [11][8]. - The gross profit margin for FY24Q2 is expected to reach 52.9%, slightly up from the previous quarter, primarily due to improvements in the advertising business [7][11]. Gaming Business - The gaming segment is anticipated to recover, with revenue expected to be 46.5 billion RMB in FY24Q2, a 4.6% increase year-on-year. Notable titles include the new game "DNF Mobile," which has already generated over 400 million USD in revenue in the Chinese iOS market as of July 10 [12][28]. Advertising and Social Network - The report forecasts that the video account feature will drive network advertising revenue to 30.8 billion RMB in FY24Q2, marking a 23% increase year-on-year. The growth in live-streaming e-commerce is expected to contribute significantly to advertising revenue [13][28]. - Social network revenue is projected to be 30.2 billion RMB in FY24Q2, with a modest year-on-year growth of 1.5% [29][28]. Financial Technology and Enterprise Services - Financial technology and enterprise services revenue is expected to reach 51.6 billion RMB in FY24Q2, reflecting a 6.0% year-on-year growth, although the growth rate is slowing due to weak offline consumption [30][28].