2024-05-31 02:31Investment Rating - The report maintains a "Buy" rating for Tencent Holdings with a target price of HKD 457, corresponding to a price-to-earnings ratio of 16 times for 2024 [3][13]. Core Insights - Tencent's AI assistant "Tencent Yuanbao" app launched on May 30, 2024, enhances work efficiency through features like AI search and document summarization, integrating fully with Tencent's ecosystem [1]. - The mobile game "Dungeon & Fighter" (DNF) achieved over USD 100 million in revenue in its first week, exceeding previous expectations of RMB 500 million for the first month [2]. - Tencent's upcoming game releases and the recovery of existing titles are expected to accelerate revenue growth in Q2, with projected revenue growth of 7% and a gross profit increase of 17% [3]. Summary by Sections AI Assistant Launch - Tencent's AI assistant app integrates various functionalities to improve user experience and efficiency, leveraging its ecosystem for enhanced search capabilities [1]. - The app features nearly 20 free applications, including language practice and creative tools, aimed at enriching daily interactions [1]. Game Performance - DNF mobile game revenue reached USD 63 million in the first week, with total revenue estimates exceeding USD 100 million across all channels [2]. - The report anticipates strong performance from new game launches and a resurgence in older titles, contributing to overall revenue growth [3]. Financial Projections - The report forecasts a 7% revenue increase in Q2, driven by advertising, gaming, and enterprise services, with respective growth rates of 16%, 4%, and 16% [3]. - The expected gross profit growth of 17% is attributed to a higher proportion of high-margin businesses within the revenue mix [3].