TENCENT(00700) 华创证券·2024-09-25 15:36Investment Rating - The report maintains a "Recommend" rating for Tencent Holdings (00700 HK) with a target price range of 473 63-526 25 HKD [1][3] Core Views - The report highlights the potential financial and business impact of Taobao's full integration with WeChat Pay, estimating significant revenue growth for WeChat Pay [1][8] - The integration is expected to bring in billions of RMB annually, with a potential revenue increase of 1%-4% for Tencent's FinTech and Business Services (FTB) segment by FY25 [1][16] - The report emphasizes the importance of data flow from e-commerce transactions, which could help Tencent improve its e-commerce capabilities, particularly in live-streaming e-commerce on WeChat Channels [1][21] Financial Impact Analysis - The report estimates that Taobao's integration with WeChat Pay could generate 4 2-25 0 billion RMB annually, depending on the penetration rate and fee structure [1][16] - Under conservative, neutral, and optimistic scenarios, the revenue impact is projected at 4 2, 8 3, and 25 0 billion RMB respectively for every 5% penetration rate [1][16] - The report forecasts that Tencent's FTB business will maintain a "low growth + gradual gross margin improvement" state due to changes in revenue structure and increased usage of WeChat Pay's "zero balance" payments [1][22] Business Impact Analysis - The integration is expected to enhance Tencent's e-commerce data capabilities, particularly in live-streaming e-commerce, which saw a 3x growth in GMV in 2023 compared to 2022 [1][21] - The report notes that WeChat Pay's data flow could help Tencent build a more robust e-commerce ecosystem, especially in areas where it has been historically weak [1][21] Financial Projections - The report projects Tencent's revenue for 2024-2026 to be 6655, 7257, and 7840 billion RMB, with year-over-year growth rates of 9%, 9%, and 8% respectively [1] - Non-IFRS net profit is expected to be 2197, 2464, and 2742 billion RMB for 2024-2026, with year-over-year growth rates of 39%, 12%, and 11% respectively [1] - Non-IFRS EPS is projected to be 23 94, 27 55, and 31 44 RMB for 2024-2026, with year-over-year growth rates of 44%, 15%, and 14% respectively [1]