Orient Securities·2025-11-18 05:39Investment Rating - The report maintains a "Buy" rating for Tencent Holdings [5] Core Views - The report anticipates sustained growth in gaming and advertising revenues, driven by key titles such as "Honor of Kings World" and "Little People’s Country" contributing to revenue growth in 2026 [3][9] - The estimated IFRS net profit for 2025-2027 is projected at 226 billion, 261 billion, and 297 billion RMB respectively, reflecting adjustments based on updated assumptions for gaming, advertising, and payment services [3][9] - A sum-of-the-parts (SOTP) valuation method is used, resulting in a target price of 664.22 HKD [3][5] Financial Performance Summary - For 2023, the company reported revenue of 609,015 million RMB, with a year-on-year growth of 9.82% [4] - The operating profit for 2023 was 152,784 million RMB, showing a significant year-on-year increase of 52.76% [4] - The net profit attributable to shareholders for 2023 was 115,216 million RMB, reflecting a decline of 38.79% year-on-year [4] - The earnings per share (EPS) for 2023 is reported at 12.60 RMB [4] - The gross margin is expected to improve from 48.13% in 2023 to 57.90% by 2027 [4] Revenue Breakdown - The report highlights that the revenue from value-added services reached 959 billion RMB in Q3 2025, with a year-on-year growth of 16% [9] - Gaming revenue for Q3 2025 was 636 billion RMB, marking a 23% increase year-on-year [9] - Marketing services revenue for Q3 2025 was 362 billion RMB, exceeding Bloomberg's expectations by 2% [9] Future Projections - The report projects a revenue increase to 754,344 million RMB in 2025, with a year-on-year growth rate of 14.25% [4] - The operating profit is expected to reach 247,023 million RMB in 2025, with a growth rate of 23.45% [4] - The net profit attributable to shareholders is forecasted to be 225,981 million RMB in 2025, reflecting a growth of 16.44% [4]