East Money Securities·2024-05-20 08:32Investment Rating - The report maintains an "Accumulate" rating for the company [4] Core Views - The company's main business advantages remain solid, with a steady recovery in game revenue, commercialization of the video number and mini-program ecosystem, and new growth driven by AI, indicating a stable performance outlook [6] - The company achieved a revenue of 1595.01 billion yuan in the reporting period, representing a year-on-year growth of 6.34% and a quarter-on-quarter growth of 2.77% [9] - Operating profit increased by 38.15% year-on-year, while net profit attributable to the company's equity holders rose by 62.12% year-on-year [9] Summary by Sections Revenue Performance - The value-added services business generated revenue of 786.29 billion yuan, a year-on-year decline of 0.89% [2] - International game market revenue grew by 34% year-on-year, with a revenue of 136 billion yuan, while domestic game revenue saw a slight decline of 2% to 345 billion yuan [2] - The internet advertising business saw a revenue increase of 26.44% year-on-year, reaching 265.06 billion yuan [3] Profitability - The company's gross margin improved to 52.58%, an increase of 7.12 percentage points year-on-year, driven by high-margin income growth from video numbers, mini-programs, and financial services [6] - The adjusted net profit for 2024-2026 is projected to be 1807 billion yuan, 1919 billion yuan, and 2073 billion yuan respectively [6] Financial Metrics - The company’s total market capitalization is approximately 3720.70 billion HKD, with a 52-week high of 401.00 HKD and a low of 260.20 HKD [5] - The projected earnings per share (EPS) for 2024-2026 are 19.2 yuan, 20.4 yuan, and 22.0 yuan, corresponding to price-to-earnings (PE) ratios of 19, 18, and 16 times respectively [6][19]