TENCENT(00700) 华兴证券·2024-11-18 04:47Investment Rating - The report maintains a "Buy" rating with a target price of HKD 520.00, representing a potential upside of approximately 28.8% from the current price of HKD 403.80 [2][17]. Core Insights - The report highlights strong growth in the gaming sector, particularly in domestic games, driven by titles such as "Dungeon & Fighter Mobile" and other flagship games, with a projected 4Q24 year-on-year growth of 16% for both domestic and international games [2][14]. - The advertising segment continues to show robust growth, with a year-on-year increase of 17%, supported by WeChat features [2][10]. - The report notes a significant increase in net profit, with a year-on-year growth of 33% in 3Q24, surpassing previous forecasts [2][10]. Financial Performance Summary - The total net revenue for 3Q24 was RMB 167.19 billion, reflecting an 8% year-on-year increase [10]. - The gaming revenue for 3Q24 reached RMB 51.80 billion, with a 13% year-on-year growth, and domestic games grew by 14% [10]. - The report projects a total revenue of RMB 658.95 billion for 2024, with a slight adjustment reflecting a 0% change from previous estimates [15]. Revenue Breakdown - Domestic mobile game revenue is expected to reach RMB 131.79 billion in 2024, showing a 9.5% year-on-year increase [8]. - The report indicates that the advertising segment's gross margin has slightly decreased, while the overall revenue structure is shifting towards higher-margin businesses [14][15]. - The financial technology and enterprise services segment is projected to grow by 2% year-on-year in 4Q24, indicating a stable performance despite market challenges [10][14]. Earnings Per Share (EPS) Forecast - The report updates the EPS forecast for 2024 to RMB 22.82, reflecting a 1% increase from previous estimates [2][15]. - For 2025, the EPS is projected to be RMB 25.46, a 3% increase from earlier forecasts [2][15]. - The 2026 EPS forecast is set at RMB 28.32, also reflecting a 3% increase [2][15].