GF SECURITIES·2024-08-18 01:38Investment Rating - The report maintains a "Buy" rating for Tencent Holdings [18] Core Views - Tencent's Q2 2024 revenue reached 161.1 billion RMB, showing a year-over-year (YoY) increase of 8% and a quarter-over-quarter (QoQ) increase of 1%, slightly below Bloomberg's consensus estimate of 161.35 billion RMB [16][26] - Non-GAAP net profit for Q2 2024 was 57.3 billion RMB, reflecting a YoY increase of 53% and a QoQ increase of 14%, exceeding the consensus estimate by 18% [16][26] - The gaming segment showed recovery with Q2 2024 revenue of 48.5 billion RMB, up 9% YoY and 1% QoQ, surpassing the consensus estimate of 47.3 billion RMB [16][30] - Advertising revenue reached 29.9 billion RMB in Q2 2024, a YoY increase of 19% and QoQ increase of 13%, driven by growth in video and long-form content [16][32] Financial Summary - Main revenue growth rates are projected as follows: -1.0% in 2022, 9.8% in 2023, 8.2% in 2024, 8.5% in 2025, and 7.4% in 2026 [3][17] - Non-GAAP net profit is expected to grow from 1,149 million RMB in 2022 to 2,166 million RMB in 2024, reflecting a growth rate of 39.7% [3][17] - Non-GAAP EPS is projected to increase from 12.00 RMB in 2022 to 23.24 RMB in 2024 [3][17] Business Segment Performance - Gaming revenue is expected to reach 196.5 billion RMB in 2024, with a growth rate of 9% [16][57] - Social network revenue is projected to be 121.9 billion RMB in 2024, reflecting a growth of 3% [16][57] - Financial and enterprise services revenue is anticipated to grow to 212.4 billion RMB in 2024, with a growth rate of 4% [16][46] Valuation - The estimated fair value of Tencent's stock is 453.34 HKD per share, based on a sum-of-the-parts (SOTP) valuation [16][49] - The report suggests that Tencent's core business value is approximately 3.83 trillion HKD, with an additional 396.1 billion HKD from investment business [16][49]