Orient Securities·2026-03-26 02:18Investment Rating - The report maintains a "Buy" rating for Tencent Holdings [3][5]. Core Insights - The report highlights that the gaming sector remains robust, with advertising and cloud services expected to see upward growth [2][10]. - Anticipated contributions from major games such as "Honor of Kings World" and "Little People World" are expected to drive growth in 2026 [3][10]. - The forecasted IFRS net profit for Tencent is projected to be 224.8 billion, 241.6 billion, and 281.9 billion RMB for the years 2025, 2026, and 2027 respectively [3][10]. Financial Performance Summary - Revenue Forecast: Expected revenues for 2025, 2026, and 2027 are 751.8 billion, 853.2 billion, and 972.3 billion RMB, reflecting growth rates of 13.9%, 13.5%, and 14.0% respectively [4][14]. - Net Profit: The net profit attributable to shareholders is forecasted to be 224.8 billion RMB in 2025, 241.6 billion RMB in 2026, and 281.9 billion RMB in 2027, with year-on-year growth rates of 15.9%, 7.5%, and 16.7% respectively [4][14]. - Earnings Per Share (EPS): Projected EPS for 2025, 2026, and 2027 are 24.64, 26.48, and 30.90 RMB [4][14]. - Profit Margins: Gross margin is expected to improve from 56.2% in 2025 to 57.3% in 2027, while net margin is projected to stabilize around 29% [4][14]. Business Segment Insights - Gaming Revenue: The gaming revenue for Q4 2025 reached 593 billion RMB, showing a year-on-year increase of 21%, driven by both domestic and international titles [10]. - Marketing Services: Marketing services revenue for Q4 2025 was 411 billion RMB, with an 18% year-on-year growth, expected to increase further in Q1 2026 due to enhanced collaborations with e-commerce platforms [10]. - Financial Technology and Enterprise Services: Revenue from this segment was 608 billion RMB in Q4 2025, with a year-on-year growth of 8%, and is expected to accelerate in 2026 [10].