TENCENT(00700) 国海证券·2025-05-19 03:05Investment Rating - The report maintains a "Buy" rating for Tencent Holdings [1][46] Core Insights - Tencent's Q1 2025 financial results show strong revenue growth driven by gaming and advertising, with significant operational leverage from AI integration [3][11][46] - The company achieved a revenue of 180 billion RMB in Q1 2025, representing a year-over-year increase of 13% and a quarter-over-quarter increase of 4% [12][17] - Non-IFRS net profit reached 61.3 billion RMB, up 22% year-over-year, indicating robust profitability [12][17] Summary by Sections Financial Performance - Q1 2025 revenue was 180 billion RMB, with operating profit at 57.6 billion RMB and net profit at 47.8 billion RMB [12][17] - The overall gross margin improved to 55.8%, up 3.24 percentage points year-over-year [17][22] - Non-IFRS operating profit grew by 18% year-over-year, reflecting effective cost management and revenue growth [12][17] Operational Data - WeChat's monthly active users (MAU) reached 1.402 billion, growing 3% year-over-year [8][13] - The number of registered accounts for value-added services increased to 268 million, a 3% year-over-year growth [8][13] Business Segments - Gaming revenue accelerated by 24% year-over-year, with domestic and international markets growing by 24% and 22% respectively [29][30] - Marketing services revenue grew by 20% year-over-year, driven by strong demand for advertising within the WeChat ecosystem [38][40] - Financial technology and enterprise services revenue increased by 5% year-over-year, with a notable recovery in cloud services [41][42] Future Projections - Revenue forecasts for 2025-2027 are set at 725.6 billion RMB, 791.3 billion RMB, and 863.1 billion RMB respectively [46] - Non-IFRS net profit projections for the same period are 254.7 billion RMB, 286.5 billion RMB, and 321.8 billion RMB [46] Capital Expenditure - Capital expenditure in Q1 2025 reached 27.5 billion RMB, a 91% increase year-over-year, reflecting investments in AI and core business operations [43][45]