TENCENT(00700) 长江证券·2025-03-19 23:30Investment Rating - The investment rating for Tencent Holdings is "Buy" and is maintained [6]. Core Insights - Tencent achieved a revenue of 172.4 billion yuan in Q4 2024, representing a year-on-year increase of 11% and a quarter-on-quarter increase of 3%. Operating profit reached 51.5 billion yuan, up 24% year-on-year, while Non-IFRS net profit attributable to shareholders was 55.3 billion yuan, reflecting a 30% year-on-year growth [2][4]. Revenue Performance - The strong performance in the gaming sector, particularly from evergreen games and new game launches, drove domestic and overseas game revenue growth in Q4. Domestic game revenue increased by 23% to 33.2 billion yuan, while overseas game revenue rose by 15% to 16 billion yuan [6][4]. - Advertising revenue remained robust, with marketing services revenue growing by 17% year-on-year to 35 billion yuan, supported by strong demand from advertisers [6][4]. - Financial technology and enterprise services revenue increased by 3% year-on-year to 56.1 billion yuan, driven by growth in wealth management and consumer loan services [6][4]. Profitability - Tencent's profit growth has consistently outpaced revenue growth for 10 consecutive quarters, with a gross margin of 52.6% in Q4, up 2.6 percentage points year-on-year [6][4]. - Non-IFRS net profit for Q4 was 55.3 billion yuan, influenced by a decrease in sales expenses and an increase in profits from joint ventures [6][4]. Capital Expenditure and Shareholder Returns - Capital expenditure in Q4 surged by 386.15% year-on-year to 36.578 billion yuan, with a significant portion allocated to AI projects [6][4]. - Tencent plans to repurchase over 80 billion Hong Kong dollars worth of shares in 2025 and increase its annual dividend by 32% to 4.50 Hong Kong dollars per share [6][4].