Huachuang Securities·2024-06-02 06:01Investment Rating - The report maintains a "Buy" rating for Tencent Holdings (00700.HK) with a target price of 464.88 HKD, based on a 20x PE for the 2024 NON-IFRS net profit [7][12][30]. Core Insights - The report highlights that Tencent's gaming segment is expected to recover, driven by Supercell's performance and the introduction of new gameplay modes in existing titles like "Peacekeeper Elite" [7][30]. - The anticipated launch of the "Metro Royale" mode in "Peacekeeper Elite" is expected to enhance user engagement and revenue generation [7][30]. - The report emphasizes that Supercell is entering a new expansion phase, with significant revenue growth projected for the coming years [16][30]. Summary by Sections Company Research - Tencent's overseas gaming revenue is significantly supported by Supercell, which contributes approximately 24% of Tencent's overseas gaming income [34]. - Supercell's revenue for 2023 was approximately 12.8 billion RMB, showing a year-over-year stability despite currency fluctuations [34][35]. Financial Projections - The revenue forecast for Tencent from 2024 to 2026 has been adjusted to 674.1 billion, 737.7 billion, and 796.2 billion RMB respectively, reflecting year-over-year growth rates of 11%, 9%, and 8% [7][30]. - The projected NON-IFRS net profit for the same period is set at 199.3 billion, 220.3 billion, and 239.3 billion RMB, with year-over-year growth rates of 26%, 11%, and 9% [7][30]. Game Performance - "Brawl Stars" has recently entered the global revenue top 10, indicating a potential acceleration in game revenue growth [9][30]. - The report notes that the introduction of new gameplay mechanics and operational enhancements has led to a resurgence in "Brawl Stars," with a projected revenue increase of 105% for 2024 [30][49]. Market Trends - The report discusses the evolution of shooting games and how new gameplay paradigms, such as the "Tarkov-like" mode, could expand the market and user base for mobile shooters [7][30]. - The anticipated performance of "Squad Busters," Supercell's first new product in nearly six years, is expected to positively impact revenue, having already topped the free charts in initial launch markets [60].