TENCENT(00700) 华创证券·2025-05-18 05:45Investment Rating - The report maintains a "Buy" rating for Tencent Holdings (00700.HK) [1] Core Insights - Tencent's 1Q25 financial results exceeded expectations, with total revenue reaching 180 billion CNY, a year-over-year increase of 13%, surpassing Bloomberg's consensus by 3% [1][8] - The NON-IFRS net profit attributable to shareholders was 61.3 billion CNY, reflecting a year-over-year growth of 22%, also exceeding Bloomberg's consensus by 3% [1][8] - The target price range is set between 545.69 and 606.33 HKD, with the current price at 508.00 HKD [1] Revenue Breakdown - The revenue structure for 1Q25 is as follows: - Gaming: 59.5 billion CNY (33% of total revenue), YOY +24% - Financial Technology and Enterprise Services: 54.9 billion CNY (31% of total revenue), YOY +5% - Social Networks: 32.6 billion CNY (18% of total revenue), YOY +7% - Marketing Services: 31.9 billion CNY (18% of total revenue), YOY +20% [15][26] Business Performance - The gaming segment continues to show strong performance, with both domestic and international markets exceeding expectations. Domestic gaming revenue was 42.9 billion CNY, YOY +24%, while international gaming revenue was 16.6 billion CNY, YOY +23% [20][18] - The social network segment's revenue growth was driven by mobile games, TME membership growth, and mini-game revenue sharing [26] - Marketing services revenue exceeded expectations due to increased user engagement and AI-driven advertising solutions, reaching 31.9 billion CNY, YOY +20% [30] Financial Projections - Revenue forecasts for 2025-2027 have been slightly adjusted to 728.6 billion CNY, 784.5 billion CNY, and 835.6 billion CNY respectively, with year-over-year growth rates of 10%, 8%, and 7% [5] - The NON-IFRS net profit projections for the same period are 256.0 billion CNY, 288.6 billion CNY, and 313.1 billion CNY, with year-over-year growth rates of 15%, 13%, and 9% [5] Capital Expenditure - Capital expenditure (CAPEX) for the quarter reached 23.0 billion CNY, a year-over-year increase of 60%, representing 13% of total revenue [32]