TENCENT(HK:00700) Huachuang Securities·2024-10-15 00:07Investment Rating - The report maintains a "Recommended" rating for Tencent Holdings (00700.HK) [1][4] Core Views - The report anticipates Tencent's revenue for Q3 2024 to reach 167.2 billion RMB, representing a year-over-year (YOY) increase of 8% and a quarter-over-quarter (QOQ) increase of 4% [1] - The expected gross profit is 89.1 billion RMB, with a YOY increase of 16% and a QOQ increase of 4%, leading to a gross profit margin (GPM) of 53% [1] - Non-IFRS operating profit is projected at 61 billion RMB, a YOY increase of 18% and a QOQ increase of 4% [1] - Non-IFRS net profit attributable to shareholders is expected to be 54.6 billion RMB, reflecting a YOY increase of 22% but a QOQ decrease of 5% [1] Revenue Breakdown - Value-Added Services: Anticipated revenue of 52.3 billion RMB for online gaming, with a YOY increase of 13% and a QOQ increase of 8% [1] - Domestic market gaming revenue is expected to be 37 billion RMB, a YOY increase of 13% [1] - International market gaming revenue is projected at 15.2 billion RMB, a YOY increase of 15% [1] - Social Network Services: Expected revenue of 30.8 billion RMB, with a YOY increase of 4% and a QOQ increase of 2% [1] - Advertising: Projected revenue of 29.6 billion RMB, a YOY increase of 15% but a QOQ decrease of 1% [1] - Financial Technology and Business Services: Expected revenue of 53.4 billion RMB, a YOY increase of 3% and a QOQ increase of 6% [1] Financial Forecasts - Revenue forecasts for 2024-2026 have been slightly adjusted to 661.1 billion RMB, 718.9 billion RMB, and 773.3 billion RMB respectively, with YOY growth rates of 9% for each year [1] - Non-IFRS net profit forecasts have been adjusted to 218.6 billion RMB, 244 billion RMB, and 271.1 billion RMB for the same period, with a YOY growth of 39% in 2024 [1] - Non-IFRS EPS is projected at 23.82 RMB, 27.28 RMB, and 31.08 RMB for 2024-2026, with a YOY growth of 43% in 2024 [1] Target Price - The target price range is set between 471.25 and 523.61 HKD, based on a valuation of 18-20 times the 2024 Non-IFRS EPS [1][4]