2024-08-09 02:01Investment Rating - The report maintains a "Buy" rating for Tencent Holdings (700 HK) with a target price of HKD 457, indicating a potential upside of 24.1% from the current closing price of HKD 368.20 [12][9][20] Core Insights - The report highlights strong growth in both domestic and overseas mobile game revenues, with domestic mobile game revenue expected to grow by 31% year-on-year in Q2 2024, significantly up from 9% in Q1 2024, driven by new game "Dungeon & Fighter: Origin" contributing approximately RMB 5.7 billion [9][10] - Overseas mobile game revenue is projected to increase by 47% year-on-year in Q2 2024, supported by Supercell's "Brawl Stars" maintaining high monthly revenue levels [9][10] - The advertising revenue is expected to grow by 16% year-on-year in Q2 2024, with a positive outlook on the long-term growth potential of the WeChat ecosystem [10] Revenue and Profit Forecast - The report estimates total revenue for Tencent in 2024 to reach RMB 663.1 billion, reflecting an 8.9% year-on-year growth, with net profit projected at RMB 203.7 billion, a 31.2% increase [11][17] - The report anticipates mobile game revenue to grow by 11% year-on-year in 2024, while PC game revenue is expected to decline by 4% due to high base effects from "Dungeon & Fighter" [2][11] Financial Metrics - The report provides a forecast for earnings per share (EPS) to be RMB 21.43 in 2024, with a price-to-earnings (P/E) ratio of 15.8 times [11][17] - The projected dividend yield for 2024 is estimated at 0.9% [11] Market Position and Competitive Landscape - Tencent's market position remains strong, with a significant share in both domestic and international gaming markets, bolstered by a robust pipeline of new game releases and sustained performance of existing titles [9][10][11]