GUOTAI HAITONG SECURITIES·2026-03-21 00:45Investment Rating - The report maintains a "Buy" rating for Tencent Holdings [7][48]. Core Insights - The report highlights solid revenue growth driven by AI investments, with Tencent expected to leverage its position as the largest social media platform to enhance its value through AI [3][48]. - For FY25 Q4, Tencent reported revenue of RMB 194.4 billion, a year-on-year increase of 12.7%, and an adjusted net profit of RMB 64.7 billion, up 17.0% year-on-year [48]. - The report projects Tencent's revenue for 2026-2028 to be RMB 830.2 billion, RMB 901.3 billion, and RMB 974.4 billion, respectively, with adjusted net profits of RMB 277.2 billion, RMB 303.4 billion, and RMB 333.4 billion [48]. Financial Summary - Revenue Forecast (in million RMB): - 2024A: 660,257 - 2025A: 751,766 - 2026E: 830,224 - 2027E: 901,271 - 2028E: 974,440 - Year-on-year growth rates: 8.4%, 13.9%, 10.4%, 8.6%, 8.1% [5]. - Adjusted Net Profit Forecast (in million RMB): - 2024A: 222,703 - 2025A: 259,626 - 2026E: 277,153 - 2027E: 303,380 - 2028E: 333,417 - Year-on-year growth rates: 41.2%, 16.6%, 6.8%, 9.5%, 9.9% [5]. - Adjusted Net Profit Margin: - 2024A: 33.7% - 2025A: 34.5% - 2026E: 33.4% - 2027E: 33.7% - 2028E: 34.2% [5]. Segment Performance - Value-Added Services: Revenue reached RMB 899 billion in FY25 Q4, a 13.8% increase year-on-year, with domestic and overseas game revenues growing by 15.1% and 31.9%, respectively [48]. - Marketing Services: Revenue of RMB 411 billion in FY25 Q4, up 17.5% year-on-year, driven by AI-enhanced advertising capabilities [48]. - Financial Technology and Enterprise Services: Revenue increased by 8.4% year-on-year, supported by growth in cloud services and WeChat store transactions [48]. Operational Data - The integration of AI into Tencent's social ecosystem is expected to drive healthy growth, with WeChat's monthly active users (MAU) showing a slight increase of 0.3% [41][42]. - The report notes a significant increase in R&D spending, which reached RMB 238 billion in FY25 Q4, reflecting a 20% year-on-year increase [19][48].