Guotai Junan Securities·2024-08-16 05:07Investment Rating - The report maintains an "Accumulate" rating for Tencent Holdings [1][19]. Core Insights - The report highlights the resilience of the advertising and gaming businesses, projecting continued high growth throughout the year. The forecast for Non-IFRS net profit for 2024-2025 has been raised to RMB 217.4 billion and RMB 241.1 billion, respectively, from previous estimates of RMB 196.2 billion and RMB 221.9 billion. The current price corresponds to a PE ratio of 14.7x and 13.2x, with a target price set at HKD 458, reflecting a PE of 18x and 16x [19]. Financial Overview - In Q2 2024, the company achieved revenue of RMB 161.1 billion, a year-on-year increase of 8%, which was in line with expectations. The Non-IFRS net profit reached RMB 57.3 billion, a significant year-on-year increase of 53%, primarily due to a reduction in income tax from the reversal of deferred tax by overseas subsidiaries [19][21]. - The gross margin for Q2 2024 was 53.3%, up 0.7 percentage points quarter-on-quarter, slightly exceeding expectations, driven by better-than-expected gross margins in VAS and FBS businesses, which were 57.1% and 47.6%, respectively [19][21]. Segment Performance - Value-added services (VAS) revenue in Q2 2024 was RMB 78.8 billion, a year-on-year increase of 6%. The gaming business showed steady recovery, with domestic and international game revenues reaching RMB 34.6 billion and RMB 13.9 billion, respectively, both growing by 9% year-on-year [19][12]. - Advertising revenue for Q2 2024 was RMB 29.9 billion, a year-on-year increase of 19%, primarily driven by growth in video accounts and long video revenues, with video account advertising revenue increasing by over 80% [19][29]. - Financial technology and enterprise services revenue was RMB 50.4 billion, with growth slowing to 4%, mainly due to weak consumer spending affecting commercial payments [19][41].