TENCENT(00700) 光大证券·2025-01-28 00:19Investment Rating - The report maintains a "Buy" rating for Tencent Holdings with a target price of HKD 430 [4][56]. Core Insights - The company is expected to achieve a revenue of RMB 1681.7 billion in Q4 2024, representing a year-over-year growth of 8.4%. This growth is primarily driven by the gaming and online advertising sectors [1][43]. - The gross margin is projected to be 53.5%, an increase of 3.6 percentage points year-over-year, with a gross profit of RMB 900.2 billion, reflecting a 16.1% increase [1][49]. - The operating profit is forecasted to be RMB 525 billion, a year-over-year increase of 28.7%, with a Non-IFRS net profit of RMB 549.3 billion, also up 28.7% year-over-year [1][49]. Summary by Sections 1. Value-Added Services - The revenue from value-added services is expected to reach RMB 766.1 billion in Q4 2024, a year-over-year increase of 10.9%. Game revenue is projected at RMB 475.3 billion, reflecting a 16.2% growth [1][43]. - Domestic game revenue is anticipated to be RMB 319.4 billion, up 18.3% year-over-year, driven by popular titles like "Honor of Kings" and "Peacekeeper Elite" [12][25]. - New game releases such as "Valorant" and "Dungeon & Fighter: Origin" are expected to contribute to revenue growth in Q4 2024 [13][19]. 2. Social Network - Social network revenue is projected to be RMB 290.9 billion in Q4 2024, a 3.1% increase year-over-year, driven by the growth of WeChat mini-games [1][26]. - The number of monthly active users for mini-games reached 500 million, with daily active users at 100 million, showing a 10% year-over-year growth [26][28]. 3. Marketing Services - The marketing services revenue is expected to be RMB 337.4 billion in Q4 2024, a year-over-year increase of 13.2% [30][34]. - The growth is anticipated to be supported by the recovery of social retail sales and the integration of WeChat's ecosystem for enhanced marketing efficiency [34][35]. 4. Financial Technology and Enterprise Services - Financial technology and enterprise services revenue is projected at RMB 558.4 billion, reflecting a 2.7% year-over-year growth [2][37]. - The improvement is attributed to a slight recovery in commercial payment services and stable cloud service revenues [37][38]. 5. Financial Performance - The company is expected to maintain steady revenue growth, with a projected Non-IFRS net profit of RMB 2,223.2 billion for 2024, reflecting a 41.0% growth year-over-year [58]. - The report highlights the potential for operational leverage to be released as high-margin businesses like video accounts and live e-commerce continue to grow [55][56].