Huaan Securities·2024-03-20 16:00Investment Rating - The investment rating for Tencent Holdings is "Buy" (maintained) [2] Core Insights - The latest performance shows revenue of 419.73 billion yuan, slightly below expectations, while profit exceeded expectations [3] - The company is expected to have net profits (Non-IFRS) of 1835.56 billion yuan, 2035.48 billion yuan, and 2275.50 billion yuan for 2024, 2025, and 2026 respectively, indicating a long-term competitive advantage in the social ecosystem [3] Financial Performance Summary - For Q4 2023, total revenue was 1551.96 billion yuan, representing a year-over-year increase of 7.1% and a quarter-over-quarter increase of 0.4% [10] - Non-IFRS net profit for Q4 2023 was 426.81 billion yuan, a year-over-year increase of 43.7% but a quarter-over-quarter decrease of 5% [10] - The revenue from online advertising reached 297.94 billion yuan in Q4 2023, showing a year-over-year growth of 20.8% and a quarter-over-quarter growth of 15.8% [3] - Financial technology and enterprise services revenue was 543.79 billion yuan in Q4 2023, reflecting a year-over-year increase of 15.1% and a quarter-over-quarter increase of 4.5% [3] Revenue Breakdown - The revenue from value-added services in Q4 2023 was 690.79 billion yuan, with a year-over-year decline of 1.9% and a quarter-over-quarter decline of 8.8% [3] - Domestic game revenue was 270 billion yuan, down 3% year-over-year, while international game revenue was 139 billion yuan, down 1% year-over-year [3] - The company has significant game reserves including DnF mobile game and others, which are expected to contribute positively in the future [3] Financial Projections - The projected operating revenue for 2024, 2025, and 2026 is 609,015 million yuan, 661,205 million yuan, and 726,768 million yuan respectively, with corresponding year-over-year growth rates of 8.6%, 9.9%, and 8.6% [11] - The projected net profit (Non-IFRS) for the same years is 157,688 million yuan, 183,556 million yuan, and 203,548 million yuan, with year-over-year growth rates of 16.4%, 10.9%, and 11.8% respectively [11]