TENCENT(00700) 光大证券·2025-01-27 06:00Investment Rating - The report maintains a "Buy" rating for Tencent Holdings with a target price of 430 HKD [4][56]. Core Insights - The company is expected to achieve a revenue of 1681.7 billion RMB in Q4 2024, representing a year-on-year growth of 8.4% driven by strong performance in value-added services, particularly in gaming and online advertising [1][43]. - The gross margin is projected to be 53.5%, an increase of 3.6 percentage points year-on-year, with a gross profit of 900.2 billion RMB, reflecting a 16.1% increase [1][49]. - Operating profit is forecasted at 525 billion RMB, a 28.7% increase year-on-year, with a Non-IFRS net profit of 549.3 billion RMB, also up 28.7% [1][49]. Summary by Sections 1. Value-Added Services - Gaming revenue is expected to reach 766.1 billion RMB in Q4 2024, with a year-on-year growth of 10.9%. Domestic gaming revenue is projected at 319.4 billion RMB, up 18.3% [1][12]. - Key games like "Honor of Kings" and "Peacekeeper Elite" continue to perform well, supported by new game launches such as "Path of Exile 2" and "One Piece: Odyssey" [1][17]. 2. Marketing Services - Online advertising revenue is anticipated to be 337.4 billion RMB, reflecting a year-on-year growth of 13.2%. The growth rate is expected to slow compared to Q3 2024 due to macroeconomic conditions [1][30]. - The integration of WeChat's ecosystem is expected to enhance marketing efficiency and attract more advertisers [1][34]. 3. Financial Technology and Enterprise Services - Revenue from financial technology and enterprise services is projected at 558.4 billion RMB, a year-on-year increase of 2.7%. This growth is attributed to improvements in commercial payment services and stable cloud service revenues [2][37]. - The launch of AI-driven services is expected to enhance the company's offerings in the financial technology sector [2][38]. 4. Financial Performance - The company is expected to maintain a steady revenue growth trajectory, with significant contributions from high-margin businesses such as gaming and WeChat video accounts [1][43]. - The operating leverage is anticipated to continue releasing as the company benefits from its diverse revenue streams [1][48]. 5. Valuation and Investment Recommendations - The report adjusts the Non-IFRS net profit forecasts for 2024-2026 slightly downward, reflecting a robust internet platform amidst a weak macroeconomic recovery [3][56]. - The current price corresponds to a Non-IFRS P/E ratio of 15 for 2024, 13 for 2025, and 12 for 2026, indicating a favorable valuation [3][58].