2024-08-15 05:10Investment Rating - The report assigns a "Buy" rating for Tencent Holdings (700 HK) with a target price of 486.00 HKD, indicating a potential upside of 30.0% from the current price of 373.80 HKD [5][6]. Core Insights - Tencent's revenue is projected to grow from 609.02 billion RMB in 2023 to 664.22 billion RMB in 2024, reflecting a year-on-year growth of approximately 9.1% [4][7]. - The financial technology and enterprise services segment is expected to maintain a steady growth trajectory, contributing significantly to overall revenue [2][4]. - The report highlights a strong performance in the value-added services and social networks segments, with expected revenues of 85.03 billion RMB and 34.24 billion RMB respectively for Q3 2024 [4][7]. Summary by Sections Financial Performance - Total revenue for Tencent is forecasted at 171.55 billion RMB for Q3 2024, with a year-on-year growth of 10.9% [4][7]. - The gross profit margin is expected to improve, with projections indicating a gross profit of 88.43 billion RMB for Q3 2024, reflecting a margin of approximately 51.5% [4][7]. User Metrics - The report notes a steady increase in active users across platforms, with WeChat MAU reaching 1.36 billion and QQ MAU at 571 million [1][2]. - Paid subscription users for video, music, and reading services are also on the rise, indicating a growing monetization potential [1][2]. Segment Analysis - The financial technology and enterprise services segment is projected to generate revenues of 55.27 billion RMB in Q3 2024, maintaining a gross margin of around 46.3% [2][4]. - The online advertising segment is expected to contribute 30.57 billion RMB in revenue for Q3 2024, with a gross margin of approximately 56.2% [4][7]. Future Projections - The report anticipates continued growth in net profit, with projections of 177.14 billion RMB for 2024, up from 115.22 billion RMB in 2023 [4][7]. - Non-GAAP operating profit is expected to reach 235.74 billion RMB in 2024, indicating a robust operational performance [4][7].