Core Viewpoint - Guosen Securities maintains an "outperform" rating for Tencent Holdings, highlighting that overseas markets have become a clear second growth curve for Tencent's gaming and cloud businesses, with strategic investments beginning to yield results [1] Group 1: Overseas Cloud Business Expansion - Tencent is accelerating its overseas cloud infrastructure, planning to invest $150 million in the Middle East and $500 million in Indonesia, with new data centers being established in Saudi Arabia and Japan [2] - The global infrastructure now covers 22 regions across five continents, operating 64 availability zones and over 3,200 global acceleration nodes [2] Group 2: Competitive Advantages - Tencent Cloud's competitive edge is driven by technology and localized services, excelling in audio-visual, gaming, and database sectors, with its media cloud services being globally recognized [3] - Localized data center construction enhances response speed, as evidenced by the migration of GoTo Group's core services to Tencent Cloud, resulting in improved app response times [3] Group 3: Market Positioning and Future Outlook - Tencent Cloud focuses on PaaS and SaaS services, avoiding price wars by leveraging high cost-performance and localized services, while also addressing chip supply issues [4] - Tencent aims to capture growth from Chinese enterprises going overseas and deepen its local SaaS market presence, with expectations of scale and profit growth in emerging markets like Southeast Asia [4] Group 4: Gaming Business Growth - Tencent's international gaming revenue grew by 43% year-on-year to RMB 20.8 billion in Q3 2025, driven by revenue from Supercell and new game releases [5] - The company anticipates overseas gaming revenue to reach RMB 75.7 billion in 2025, accounting for 32% of Tencent's total gaming revenue, an increase of 3 percentage points [5] Group 5: GaaS and IP Development - Tencent is enhancing its GaaS model by applying domestic long-term operation experiences to extend product lifecycles and strengthen IP value through cross-media development [7] - AI is being integrated into all aspects of game production, improving efficiency and enhancing player experience, with 95% of employees using AI tools [8] Group 6: AI Technology in Gaming - Tencent has made significant advancements in AI technology for gaming, achieving capabilities in scene coherence and real-time generation, although challenges remain in character behavior and continuity [9] - The company is positioned to leverage its expertise in both gaming and AI to create tailored gaming experiences and enhance production capabilities [9]

Core Insights - Tencent is focusing on expanding its overseas cloud and gaming businesses, leveraging its technological advantages and local service capabilities to capture growth opportunities in international markets [1][4][6]. Overseas Cloud Business - Tencent Cloud adopts an "infrastructure-first" strategy, accelerating data center deployment globally, currently covering 22 regions [1]. - The company plans significant investments in overseas infrastructure, including $150 million in the Middle East and $500 million in Indonesia for new data centers [1]. - Tencent Cloud's competitive edge lies in its leading technology and localized services, successfully migrating key clients like GoTo in Indonesia and Charoen Pokphand Group in Thailand [4][6]. Overseas Gaming Business - Tencent's overseas gaming revenue is projected to reach 75.7 billion yuan in 2025, with a year-on-year growth of 31%, driven by its industrialization capabilities and strategic acquisitions [2][6]. - The company is increasingly collaborating with game development teams, enhancing its Game as a Service (GaaS) model to replicate successful domestic strategies in international markets [2][7]. AI Empowerment in Gaming - AI tools are being extensively utilized in game development, with 95% of employees at Tencent's Photon Studio using AI to enhance production efficiency and user experience [3][8]. - The company is advancing AI capabilities beyond traditional models, achieving real-time scene generation and improving player retention through AI-driven features [3][9]. Future Outlook - Tencent is positioned to benefit from the growing demand for cloud services among Chinese enterprises going global and the local SaaS market, particularly in Southeast Asia [5][6]. - The company aims to enhance its GaaS operations and IP value through cross-media development and AI integration, ensuring long-term brand sustainability [7][8].

近日， 开发商 Drama Studios 宣布获得腾讯的投资。这可能是一个很陌生的厂商名字，但是这家厂商在2023年的时候发布过一款超写实枪战游戏，名叫 《Unrecord》。《Unrecord》是一款单人FPS游戏，玩家将以一位特警的执法记录仪的视角来体验游戏的故事内容。在解决复杂案件的过程中，玩家需要 运用自己的战术和侦查技能才能获得完成任务。 初看这款游戏的视频演示，很多人都会误以为是在看执法记录仪，后来Drama Studios 跑出来澄清，这一些都是游戏，工作室还承诺将"打造一款以超现实 主义、沉浸式游戏体验和引人入胜的故事情节为特色的单人第一人称射击游戏"。 而这一效果直接拉爆了玩家们的情绪，所以很快，工作室就宣布《Unrecord》在Steam愿望单上的数字突破60万。 不过在这之后，《Unrecord》就开始淡出人们视野，因为Drama Studios是一个小团队，要处理《Unrecord》这个项目来说显得非常吃力，同时还需要很多 的时间。 终于，《Unrecord》的潜力被腾讯发现了。 近日，腾讯合作伙伴与投资副总裁Mark Maslowicz在宣布这一消息时表示："腾讯非常重视创意人才。 ...

Group 1: Core Insights - The overseas business segments of major Chinese internet companies have become "profit dark horses," with Alibaba's international digital commerce turning profitable, Meituan's Keeta achieving monthly profitability in Hong Kong, and Tencent's overseas gaming revenue surging by 43% year-on-year [1] - As domestic internet traffic growth reaches diminishing returns, going overseas has become a necessary strategy for companies, evolving from "go overseas or go home" to "no core capabilities, no overseas expansion" [1] Group 2: Cross-Border E-commerce - Alibaba's international retail business reported revenue of 28.068 billion yuan, a 10% year-on-year increase, driven by growth from AliExpress and other international operations [2] - The international wholesale business generated 6.731 billion yuan, an 11% increase year-on-year, attributed to growth in value-added services related to cross-border business [2] - Temu's gross merchandise volume (GMV) growth is primarily due to rapid penetration in the European (30-40% share, 60-70% year-on-year growth) and Latin American markets (over 15% share), while growth in North America is slowing [2][3] Group 3: Local Lifestyle Services - Meituan's Keeta achieved its first monthly profitability in Hong Kong, marking a significant milestone in its overseas expansion [4] - Keeta is expanding in the Middle East and Brazil, utilizing AI algorithms and big data to optimize delivery routes and improve efficiency [4][5] - The competitive landscape in Brazil is intense, with Didi and Uber also expanding their food delivery services, indicating a battle for market share [6] Group 4: Entertainment Sector - Tencent's international gaming revenue reached 20.8 billion yuan, a 43% year-on-year increase, driven by successful titles like "Clash Royale" and "PUBG MOBILE" [7] - NetEase's overseas strategy is undergoing significant adjustments, with the closure of several overseas studios despite some successful game launches [8] Group 5: Mobile Phones - Xiaomi's smartphone revenue declined by 3.1% year-on-year to 46 billion yuan, attributed to a decrease in average selling price (ASP) [9] - Xiaomi's overseas internet service revenue reached a record high of 3.3 billion yuan, growing by 19.1% year-on-year, with a notable increase in the share of high-margin overseas market revenue [10] - The competition in the African market between Xiaomi and Transsion is intensifying, leading to price wars [10] Group 6: Conclusion - The third-quarter financial reports indicate a shift in Chinese internet companies' overseas strategies, moving from reliance on policy advantages and low prices to focusing on supply chain capabilities, AI technology, localization, and compliance management [12] - The transformation represents an upgrade from being participants in the global value chain to integrators, with challenges such as geopolitical compliance risks and cultural differences remaining significant [13]

Core Viewpoint - Tencent's Q3 performance exceeded market expectations, with significant growth in revenue, gross profit, and adjusted net profit, driven by strong performance in its gaming, marketing, and fintech segments [1][2][3]. Group 1: Q3 Financial Performance - Tencent reported Q3 revenue of 192.87 billion yuan, a year-over-year increase of 15% and a quarter-over-quarter increase of 5%, surpassing the consensus estimate of 188.8 billion yuan [1]. - Gross profit reached 108.8 billion yuan, up 22% year-over-year and 4% quarter-over-quarter, also exceeding the expected 106.39 billion yuan [1]. - Adjusted net profit was 70.55 billion yuan, reflecting an 18% year-over-year increase and a 12% quarter-over-quarter increase, beating the consensus estimate of 65.97 billion yuan by 6.9% [1]. Group 2: Value-Added Services (VAS) - Domestic gaming revenue was 42.8 billion yuan, a 15% year-over-year increase, driven by stable contributions from games like "Delta Action" and "Honor of Kings" [2]. - International gaming revenue reached 20.8 billion yuan, a 43% year-over-year increase, exceeding expectations due to growth from Supercell games and strong sales of new titles [2]. Group 3: Marketing Business - Marketing revenue for Q3 was 36.2 billion yuan, a 21% year-over-year increase, surpassing the expected 35.6 billion yuan, driven by AI-enhanced advertising platforms [2]. - The introduction of Tencent's advertising AIM+ improved targeting and bidding capabilities, leading to increased ad exposure and advertiser investment [2]. Group 4: Fintech Performance - Fintech revenue was 58.2 billion yuan, a 10% year-over-year increase, supported by growth in commercial payment activities and consumer loan services [3]. - AI service demand contributed to revenue growth, with significant improvements in the capabilities of Tencent's AI models [3]. Group 5: Future Outlook - The company projects non-IFRS net profits of 257.02 billion yuan, 290.51 billion yuan, and 319.01 billion yuan for 2025, 2026, and 2027 respectively, indicating stable growth in gaming and advertising sectors [3].

Core Insights - The company reported a revenue of 193 billion RMB in Q3 2025, marking a 15% year-on-year increase and a 5% quarter-on-quarter increase, driven by the expansion of core ecosystem scenarios such as video accounts, mini-programs, and search [1] - Non-IFRS net profit attributable to shareholders reached 70.6 billion RMB, reflecting an 18% year-on-year growth and a 12% quarter-on-quarter growth, indicating improved operational efficiency and profit quality [1] - The AI's role in enhancing efficiency across various business lines is becoming increasingly significant, with a focus on precision targeting, search relevance, content generation, and game production [1] Business Segments Gaming - Value-added services revenue was 95.9 billion RMB, a 16% year-on-year increase, with domestic game revenue at 42.8 billion RMB, up 15% [1] - Key titles such as "Delta Force," "Honor of Kings," and "Peacekeeper Elite" showed strong performance, with "Delta Force" achieving a DAU of over 30 million and "Honor of Kings" reaching a record DAU of 139 million [1] - International game revenue surged by 43% to 20.8 billion RMB, driven by significant contributions from titles like Supercell's "Clash Royale" [1] Marketing Services - Marketing services revenue for Q3 was 35.8 billion RMB, reflecting a 21% year-on-year increase, with video accounts and mini-programs leading the growth [1] - The improvement in eCPM and automated ad placement efficiency driven by AI contributed to revenue growth, although traffic expansion remained a primary revenue driver [1] Financial Technology and Enterprise Services - Financial technology and enterprise services revenue reached 58.2 billion RMB, a 10% year-on-year increase, with strong performance in commercial payments and enterprise services [1] - The company maintained one of the lowest bad debt ratios in the industry for consumer credit, while its cloud business continued to grow, supported by advancements in AI capabilities [1] Investment Outlook - The target price for the company's stock has been raised to 790 HKD, indicating a potential upside of 26.7% from the previous closing price, with a "buy" rating maintained due to improved profit margins and AI-driven returns in high-margin sectors [2]

Core Viewpoint - Tencent Holdings reported strong financial performance for Q3 2025, with significant year-on-year growth in revenue, operating profit, and net profit, indicating robust business fundamentals and growth potential in key segments [1][4]. Group 1: Financial Performance - In Q3 2025, Tencent achieved operating revenue of 192.87 billion yuan, a year-on-year increase of 15.36% [1] - The gross margin was 56.41%, up by 3.28 percentage points year-on-year [1] - Adjusted operating profit reached 72.57 billion yuan, growing 18.44% year-on-year, with an operating profit margin of 37.63% [1] - Adjusted net profit attributable to shareholders was 70.55 billion yuan, reflecting a year-on-year increase of 17.95%, corresponding to a profit margin of 36.58% [1] Group 2: Gaming Revenue - Domestic gaming revenue for Q3 2025 was 42.8 billion yuan, up 15% year-on-year, driven by the success of new titles like "Delta Action" and the growth of established games such as "Honor of Kings" and "Peacekeeper Elite" [2] - International gaming revenue reached 20.8 billion yuan, a 43% year-on-year increase (42% at constant exchange rates), supported by revenue growth from Supercell games and new PC and console releases [2] - The agreement with Apple regarding a 15% fee on WeChat mini-program games is expected to enhance payment conversion rates and expand the mini-program market [2] Group 3: Advertising Revenue - Advertising and marketing revenue for Q3 2025 was 36.2 billion yuan, a year-on-year increase of 21% [3] - The launch of the AIM+ advertising product matrix has improved ad targeting and ROI for advertisers, contributing to revenue growth [3] - Enhanced recommendation algorithms and increased user engagement in platforms like Video Accounts have driven higher ad loading rates and eCPM [3] Group 4: Future Outlook - Tencent is developing AI capabilities within the WeChat ecosystem, aiming to create an AI operating system applicable across various sectors such as e-commerce and payments [4] - The company maintains a strong focus on AI investments, with expectations for revenue growth reaching 750.4 billion yuan by 2027, alongside adjusted net profits of 258.9 billion yuan [4] - The projected PE ratios for 2025-2027 are 21.1, 18.4, and 17.2 times, indicating a favorable valuation outlook [4]

Core Viewpoint - Tencent's Q3 2025 performance significantly exceeded expectations, driven by a strong recovery in the gaming business and effective monetization of AI technology in advertising [1] Financial Performance - Tencent reported total revenue of 192.9 billion RMB, a year-on-year increase of 15%, surpassing market expectations by 2% [1] - Non-IFRS net profit attributable to shareholders reached 70.6 billion RMB, up 18% year-on-year, exceeding market expectations by 7% [1] - The gaming business grew by 23% year-on-year, with domestic growth at 15% and international growth at 43%, both significantly exceeding expectations [2][3] - Advertising revenue increased by 21% year-on-year, with a gross margin improvement of 3.7 percentage points to 56.4% [1] Gaming Business Insights - Domestic gaming revenue reached 42.8 billion RMB, with notable performances from long-standing games like "Honor of Kings" and "Peacekeeper Elite" [2] - The new game "Delta Action" achieved over 30 million daily active users in September, ranking among the top three in revenue [2] - International gaming revenue reached 20.8 billion RMB, driven by strong performances from "PUBG Mobile" and new titles [2][3] - Despite a projected slowdown in international gaming growth in Q4 2025 due to high base effects, a robust pipeline of games for 2026 is expected to support long-term growth [2][3] AI and Advertising Performance - AI significantly enhanced advertising eCPM and inventory release efficiency, contributing to a 21% year-on-year increase in advertising revenue, totaling 36.2 billion RMB [3] - The gross margin for advertising improved from 53% to 57% year-on-year, driven by AI advancements [3] - AI-driven advertising targeting and technology upgrades contributed 40-50% of the eCPM increase [3] Other Business Segments - Financial Technology Services (FBS) revenue was 58.2 billion RMB, a 10% year-on-year increase, with a gross margin improvement of 2.4 percentage points to 50.2% [4] - The company experienced robust growth in online payments and improvements in offline retail and transportation sectors [4] - Cash capital expenditure for Q3 2025 was 20 billion RMB, with a downward adjustment in 2025 CapEx guidance due to temporary chip supply constraints rather than a strategic reduction [4] Investment Outlook - Tencent's Q3 performance highlights strong growth in gaming and AI-driven profit release, with a commitment to high-quality growth strategies [5] - The company maintains a "buy" rating, reflecting confidence in its strategic position in the consumer sector and healthy profit growth [5]

Market Overview - The overall market is experiencing a pullback, with a strong atmosphere of profit-taking [2] - The Hang Seng Index fell by 0.71%, the Hang Seng China Enterprises Index dropped by 0.74%, and the Hang Seng Tech Index decreased by 0.96%, indicating rising risk aversion [2] - The total trading volume in the market was approximately 217.6 billion HKD, with short selling amounting to about 44.5 billion HKD, representing 23.22% of the total trading volume [2] Sector Performance - The film and entertainment sector continues to see outflows, while the pharmaceutical sector is under pressure, particularly in areas like brain-machine interfaces and innovative drugs [3] - Commodity-related sectors are also showing weakness, with gold prices dropping approximately 180 USD from their highs, leading to declines in gold and non-ferrous metal stocks [3] - The electric power and new energy sectors are experiencing a downturn, with expectations for policy catalysts cooling off [3] Individual Stock Highlights - Lithium battery and new energy vehicle sectors are showing resilience, with lithium carbonate futures rising over 5%, driving stocks like Ganfeng Lithium (1772.HK) higher [3] - Ganfeng Lithium's chairman predicts a 30% increase in global lithium carbonate demand by 2026, potentially reaching 1.9 million tons, with prices possibly exceeding 150,000 RMB per ton [3] - Consumer-related sectors are performing relatively well, with stocks in baby products, food, and airlines showing gains, indicating a shift of defensive capital towards domestic demand [3] Company Analysis: Tencent Holdings (700.HK) - Tencent's gaming business exceeded expectations, with domestic market revenue reaching 42.8 billion HKD (up 15% YoY) and international market revenue at 20.8 billion HKD (up 43% YoY) [6] - The advertising business generated 36.24 billion HKD, reflecting a 21% YoY increase, driven by AI-enhanced targeting technology [7] - Financial technology and enterprise services recorded a revenue of 58.2 billion HKD in Q3, marking a 10% YoY growth, supported by improved consumer trends and AI-related services [7] Ecosystem and AI Development - Tencent's WeChat and QQ platforms maintain strong user engagement, with WeChat's monthly active users at 1.414 billion (up 2% YoY) and QQ's at 517 million (down 8% YoY) [8] - The company is advancing in AI technology, with its mixed foundation model achieving industry-leading levels in image and 3D generation [8] - The integration of AI in advertising is enhancing marketing ROI, significantly improving efficiency across various sectors [8] Investment Recommendation - Tencent's Q3 2025 performance demonstrates the deep integration of AI across its business lines, showcasing strong growth resilience in gaming, advertising, and enterprise services [9] - The company is projected to maintain growth through AI-driven advertising efficiency, new game launches, and consumer recovery [9] - A target price of 788 HKD is set, corresponding to a 25.7x PE for 2025 and 23.0x for 2026, maintaining a "Buy" rating [9]

Core Viewpoint - Tencent reported a revenue of 192.9 billion yuan for Q3 2025, representing a year-on-year growth of 15.4%, driven primarily by advertising and gaming businesses [1][4] Revenue Growth - The company's network gaming revenue reached 63.6 billion yuan, up 23% year-on-year, with domestic market revenue increasing by 15% to 42.8 billion yuan and international market revenue growing by 43% to 20.8 billion yuan [2][6] - Marketing services revenue grew to 36.2 billion yuan, a 21% increase year-on-year, benefiting from eCPM price growth and enhanced user engagement [2][6] Profitability - Adjusted operating profit for Q3 2025 was 72.6 billion yuan, reflecting an 18% year-on-year increase, with a comprehensive gross margin of 56%, up 3 percentage points [1][4] - The gross margins for value-added services, online advertising, and financial technology & enterprise services improved by 4 percentage points each [1][4] Investment in R&D - R&D expenses reached a record high of 22.8 billion yuan, a 28% year-on-year increase, indicating the company's commitment to AI talent and technology [1][4] Capital Expenditure - Capital expenditure (Capex) for Q3 2025 was 13 billion yuan, down 24% year-on-year, primarily due to chip supply constraints [1][4] Future Outlook - The company maintains a "better than market" rating, with projected adjusted net profits of 262.6 billion yuan, 301.3 billion yuan, and 345.4 billion yuan for 2025-2027, reflecting a slight upward revision [7]