TENCENT-4Q23回顾：高利润业务收入增长促进毛利润大幅提升

Investment Rating - The report maintains a "Buy" rating for Tencent Holdings with a target price of HK $430.00, representing a potential upside of 49% from the current price of HK$ 288.80 [2][4]. Core Insights - The report highlights significant growth in high-margin business revenues, leading to a substantial increase in gross profit. The focus will shift towards measuring organic growth through gross profit growth metrics [4][9]. - The management has proposed a 42% increase in the annual dividend for 2023 to HK $3.40 per share, with a total dividend payout of HK$ 32 billion. Additionally, the stock buyback program for 2024 is expected to exceed HK $100 billion, doubling the previous year's buyback [9][32]. Financial Performance Summary - Revenue and Profit Forecasts: - 2022A Revenue: RMB 554,552 million - 2023A Revenue: RMB 609,015 million - 2024E Revenue: RMB 676,279 million (down 3% from market forecast) - 2025E Revenue: RMB 749,798 million (down 4% from market forecast) - 2022A Net Profit: RMB 115,649 million - 2023A Net Profit: RMB 157,688 million - 2024E Net Profit: RMB 188,885 million - 2025E Net Profit: RMB 213,165 million [5][3]. - Earnings Per Share (EPS) Projections: - 2022A EPS: RMB 11.84 - 2023A EPS: RMB 16.32 - 2024E EPS: RMB 18.69 (up 5% from market forecast) - 2025E EPS: RMB 21.24 (up 3% from market forecast) [5][3]. Business Segment Performance - Online Gaming: - Domestic gaming revenue decreased by 3% year-on-year in 4Q23, with expectations of a gradual recovery in 2024. The anticipated release of "Dungeon and Fighter Mobile" in 2Q24 is expected to contribute significantly to growth [9][32]. - Online Advertising: - Revenue from online advertising grew by 21% year-on-year in 4Q23, driven by advancements in advertising platform upgrades and a doubling of revenue from video accounts. The report forecasts an 18% year-on-year growth in advertising revenue for 1Q24 and 2024 [9][36]. - Financial Technology and Business Services: - Revenue in this segment increased by 15% year-on-year in 4Q23, with expectations of continued growth driven by strong demand for cloud services and commercial payments [9][36]. Valuation Analysis - The SOTP (Sum of the Parts) valuation for Tencent is detailed as follows: - Social Value-Added Services: HK$ 200 billion - Financial Technology: HK $956 billion - Content Ecosystem: HK$ 116 billion - Total Company Valuation: HK$4,552 billion [20][24].