TENCENT(HK:00700) Wanlian Securities·2025-08-13 08:08Investment Rating - The industry is rated as "Outperforming the Market," indicating a projected increase of over 10% relative to the market index in the next six months [5][30]. Core Insights - The Chinese gaming market saw a revenue increase of 14.08% year-on-year in the first half of 2025, reaching 168 billion yuan, despite a quarter-on-quarter decline of 5.89% [1][11]. - The mobile gaming sector specifically achieved a revenue of 125.31 billion yuan, with a year-on-year growth of 16.55% and a quarter-on-quarter decline of 4.12% [1][14]. - Strong performance from evergreen products and stable issuance of game licenses contributed to the market growth [1][28]. Summary by Sections Chinese Gaming Market - The overall gaming market in China generated a revenue of 168 billion yuan in the first half of 2025, marking a year-on-year growth of 14.08% and a quarter-on-quarter decline of 5.89% [1][11]. - The mobile gaming market's revenue reached 125.31 billion yuan, with a year-on-year increase of 16.55% driven by strong performances from popular titles and new product launches [1][14]. Global Gaming Market - Tencent's "Honor of Kings" was the only mobile game to surpass $1 billion in revenue in the first half of 2025, leading the global revenue rankings [2][17]. - The top three games in revenue growth included "PUBG MOBILE," "Endless Winter," and "Pokémon TCG pocket," each achieving over $170 million in growth [2][17]. Revenue Rankings - In June 2025, Tencent's games occupied five spots in the top ten revenue rankings on the Chinese App Store, maintaining a dominant market position [3][19]. - The top five games included "Honor of Kings," "Peace Elite," and "Endless Winter," with Tencent holding four of the top five positions [3][19]. Overseas Market - Chinese self-developed games generated $9.501 billion in overseas revenue in the first half of 2025, reflecting an 11.07% year-on-year increase [4][23]. - "Endless Winter" led the overseas revenue rankings, with total global revenue exceeding $2.8 billion [4][26]. Investment Recommendations - The report suggests focusing on companies with abundant game license reserves, strong R&D capabilities, frequent high-quality IP collaborations, and stable content output [4][28].