TENCENT(00700) 广发证券·2024-12-29 06:43Investment Rating - The report maintains a "Buy" rating for Tencent Holdings with a target price of HKD 485.21 per share [24][18] Core Views - WeChat Mini Stores are leveraging Tencent's social ecosystem to drive supply and demand, creating a unique lightweight social e-commerce model [17] - The "Gift Sending" feature in WeChat Mini Stores is expected to enhance user engagement and drive incremental growth for merchants [34] - WeChat Mini Stores have established a solid foundation with over RMB 2 trillion in GMV from mini-programs in Q3 2024, primarily driven by e-commerce transactions [21][17] - The integration of public and private domain traffic in WeChat Mini Stores is expected to enhance user conversion and repeat purchases [29] Financial Projections - Revenue is projected to grow by 8.0% in 2024 to RMB 657.9 billion and by 8.4% in 2025 to RMB 713.0 billion [18][19] - Non-GAAP net profit is expected to increase by 45.0% in 2024 to RMB 221.8 billion and by 10.2% in 2025 to RMB 244.4 billion [18][19] - Non-GAAP EPS is forecasted to rise from RMB 16.13 in 2023 to RMB 23.93 in 2024 and RMB 26.38 in 2025 [19] WeChat Mini Stores and Social E-commerce - WeChat Mini Stores are positioned as the core e-commerce component within WeChat, integrating public and private domain traffic to drive transactions [27][29] - The "Gift Sending" feature is expected to create new demand scenarios, especially during festive seasons like Chinese New Year, potentially replacing traditional red packet gifting [34] - Merchants with WeChat Mini Stores will receive priority in search results, enhancing visibility and driving traffic [64] Market Performance and Valuation - Tencent's stock is expected to outperform the market by more than 15% over the next 12 months [56] - The company's Non-GAAP PE ratio is projected to decrease from 16.7x in 2023 to 14.6x in 2025, indicating potential undervaluation [19]