Shenwan Hongyuan Securities·2025-11-16 07:12Investment Rating - The report maintains a "Buy" rating for Tencent Holdings [1] Core Insights - Tencent Holdings reported a Q3 2025 revenue of 192.9 billion RMB, a 15% year-on-year increase, exceeding Bloomberg consensus expectations by 2% [8] - Adjusted net profit for Q3 2025 was 70.6 billion RMB, up 18% year-on-year, surpassing consensus expectations by 7% [8] - The growth in revenue was driven by strong performance in value-added services and advertising, particularly in overseas gaming [8] - The report highlights the significant contribution of new games and the sustained performance of established titles [8] - The company is expected to see continued growth in adjusted net profit, with projections of 260.2 billion RMB, 300.7 billion RMB, and 337.3 billion RMB for 2025, 2026, and 2027 respectively [8] Financial Data and Earnings Forecast - Revenue projections for Tencent Holdings are as follows: - 2023: 609 billion RMB - 2024: 660.3 billion RMB - 2025E: 755.6 billion RMB - 2026E: 845.3 billion RMB - 2027E: 926.7 billion RMB [7] - Adjusted net profit forecasts are: - 2023: 157.7 billion RMB - 2024: 222.7 billion RMB - 2025E: 260.2 billion RMB - 2026E: 300.7 billion RMB - 2027E: 337.3 billion RMB [7] - The report indicates a projected increase in earnings per share from 16.68 RMB in 2023 to 36.89 RMB in 2027 [7] Revenue Breakdown - The revenue breakdown for Q3 2025 includes: - Value-added services: 95.9 billion RMB - Online games: 63.6 billion RMB - Social networks: 32.2 billion RMB - Online advertising: 36.2 billion RMB - Financial technology and enterprise services: 58.2 billion RMB [9] - Year-on-year growth rates for revenue segments indicate strong performance across various business lines, particularly in online advertising and value-added services [9] Valuation - The report employs a Sum-of-the-Parts (SOTP) valuation method, estimating a target price of 791 HKD, representing a potential upside of 23.4% from the current price [8][10]