TENCENT(00700) 东吴证券·2024-08-20 00:42Investment Rating - The report maintains a "Buy" rating for the company, citing strong business barriers and a robust ecosystem, with growth in video accounts, mini-programs, and fintech businesses [1] Core Views - The company's gross margin improvement exceeded expectations, leading to an upward revision of adjusted net profit forecasts for 2024-2026 to 2050/2381/2692 billion yuan, with corresponding PE ratios of 17/14/13x [1] - 2Q24 revenue reached 1611 billion yuan (yoy+8%), slightly below Bloomberg consensus of 1614 billion yuan, while non-IFRS net profit was 573 billion yuan (yoy+53%), significantly exceeding the consensus of 487 billion yuan [11][14] - Overall gross margin in 2Q24 was 53.31% (yoy+5.83pct), driven by rapid growth in high-margin revenue sources such as advertising and value-added services [13][68] Business Performance Gaming - 2Q24 online gaming revenue was 485 billion yuan (yoy+9%), in line with Bloomberg consensus of 488 billion yuan [15][26] - Domestic gaming revenue was 346 billion yuan (yoy+9%), above consensus of 336 billion yuan, driven by growth in titles like "Valorant" and "Dungeon & Fighter: Origins" [28] - International gaming revenue was 139 billion yuan (yoy+9%), slightly below consensus of 141 billion yuan [44] Advertising - 2Q24 advertising revenue was 299 billion yuan (yoy+19%), above Bloomberg consensus of 294 billion yuan, driven by growth in WeChat video accounts, long videos, and mini-programs [15][32] - Advertising gross margin was 55.64% (yoy+6.7pct), benefiting from increased revenue from WeChat video accounts and search ads [38] Fintech and Business Services - 2Q24 fintech and business services revenue was 504 billion yuan (yoy+4%), below Bloomberg consensus of 524 billion yuan, with slower growth in commercial payments and a decline in consumer loan services [13][33] - Wealth management services saw double-digit growth, while enterprise services grew by double digits, driven by cloud services and video account merchant service fees [13][34] - Fintech and business services gross margin was 47.64% (yoy+9.26pct), supported by higher-margin wealth management services and video account merchant fees [69] Social Networks - 2Q24 social network revenue was 305 billion yuan (yoy-2%), in line with Bloomberg consensus, with growth in music and long video subscriptions offset by declines in music and game live streaming [44] User Metrics - WeChat (including WeChat overseas) MAU reached 1.371 billion (yoy+3%), above Bloomberg consensus of 1.356 billion [50] - QQ mobile MAU was 571 million (yoy+0%), above consensus of 568 million [50] - Paid value-added service accounts reached 263 million (yoy+12%), above consensus of 259 million [50] Financial Forecasts - Revenue for 2024-2026 is forecasted at 6651/7324/8101 billion yuan, with yoy growth of 9.21%/10.11%/10.60% [14] - Non-IFRS net profit for 2024-2026 is projected at 2050/2381/2692 billion yuan, with yoy growth of 30.03%/16.10%/13.10% [14] - EPS for 2024-2026 is estimated at 19.78/20.16/21.16 yuan per share [14]