TENCENT(00700) 国信证券·2025-01-14 03:15Investment Rating - The report maintains an "Outperform" rating for Tencent Holdings (00700 HK) [1] Core Views - Tencent's content and platform strengths position it well for leadership in the AI era [1][5] - Tencent Video and Tencent Literature Group demonstrate strong operational strategies and growth potential [3] - Tencent's AI and e-commerce initiatives leverage its data, social, and scenario advantages [4][6] Tencent Video - Tencent Video focuses on high-quality content with 9 S+ series launched in 2024 [3] - Membership business grows steadily with SVIP users increasing and ARPPU rising [3][11] - Innovative advertising strategies enhance ad effectiveness and broaden revenue channels [3][11] - AIGC capabilities integrated into animation production improve efficiency and quality [33] Tencent Literature Group - Tencent Literature maintains a leading position in online literature with 170k new authors and 320k new novels added in H1 2024 [12] - The "Farm-Factory-Park" IP development model drives cross-media success and global expansion [14][24] - AI translation technology supports globalization with 3 billion cumulative users on Webnovel and 6k translated works by Nov 2024 [14] AI and E-commerce - Tencent leverages its HPC and data processing capabilities to close the gap with global peers in AI [4][6] - WeChat's high daily usage (40-50 times) provides a strong foundation for AI-driven user engagement [4][6] - WeChat Shop integrates e-commerce components, enhancing data and user profiling for targeted advertising [4][25] - E-commerce ad monetization rate on WeChat is below 1%, with significant room for growth compared to competitors like Kuaishou (3%) and Douyin (6%) [17] Financial Projections - Adjusted net profit for 2024-2026 is projected at 2198/2482/2729 billion yuan, with PE valuations of 16/14/12x [20][31] - Revenue growth is expected at 9% in 2025 and 8% in 2026, with ROE improving to 20% in 2024 [22] Strategic Initiatives - Tencent's AI tools, such as "Yuanbao" and "ima," enhance user experience through multimodal capabilities and seamless integration with WeChat [25] - WeChat Shop's integration of online and offline commerce is expected to drive future growth [25]