Investment Rating - The investment rating for Tencent Holdings is "Buy" (maintained) [1] Core Views - Tencent's Q3 revenue reached 192.87 billion yuan, representing a year-over-year increase of 15% and a quarter-over-quarter increase of 5%, exceeding consensus expectations of 188.8 billion yuan [4] - The adjusted net profit for Q3 was 70.55 billion yuan, up 18% year-over-year and 12% quarter-over-quarter, surpassing the consensus estimate of 65.97 billion yuan [4] - The growth in revenue and profit is driven by strong performance in the gaming sector, robust advertising growth fueled by AI, and improvements in financial technology services [4][10] Summary by Sections Q3 Performance - Revenue: 192.87 billion yuan (yoy +15%, qoq +5%), above consensus of 188.8 billion yuan [4] - Gross Profit: 108.8 billion yuan (yoy +22%, qoq +4%), exceeding consensus of 106.39 billion yuan [4] - Adjusted Net Profit: 70.55 billion yuan (yoy +18%, qoq +12%), above consensus of 65.97 billion yuan [4] Value-Added Services (VAS) - Domestic game revenue reached 42.8 billion yuan (yoy +15%), driven by stable contributions from titles like "Delta Action" and "Honor of Kings" [5] - International game revenue was 20.8 billion yuan (yoy +43%), exceeding expectations due to growth from Supercell games and new releases [5] Marketing Business - Marketing revenue was 36.2 billion yuan (yoy +21%), surpassing expectations, driven by AI-enhanced advertising platforms [6] - The combined MAU for WeChat reached 1.414 billion, a year-over-year increase of 2% [6] Financial Technology - Financial technology revenue was 58.2 billion yuan (yoy +10%), supported by growth in commercial payment activities and consumer loan services [7] AI Investments - Capital expenditure for Q3 was 12.98 billion yuan, a year-over-year decrease of 24% [8] - AI capabilities are continuously improving, with advancements in transaction ecosystems and model performance [8][9] Investment Recommendations - Projected net profits for 2025, 2026, and 2027 are 257.02 billion yuan, 290.51 billion yuan, and 319.01 billion yuan respectively, with stable growth expected in gaming and advertising sectors [10]

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]

（1）LLM：公司于9 月末发布文生图模型混元图像3.0，性能达到行业领先水平，超过谷歌的Nano Banana 模型；（2）Agentic AI：将MCP 集成于微信生态内，推动智能体 AI 在小程序领域的应用，有 望将微信打造为AI 时代操作系统。CAPEX 方面，受芯片供给等因素影响，公司25Q3 CAPEX 为129.83 亿元，同比下降24%，环比下降32%。我们认为短期内，公司主要将算力资源投入于内部业务的使用， 如游戏、广告、混元基础模型能力升级等，对于外部云服务收入则相对谨慎，目前公司用于支持内部业 务发展的GPU 资源充足。 向后展望，腾讯正基于微信生态系统，开发微信内部AI 智能体，有望应用于电商、支付、办公等多场 景，打造AI 时代操作系统。 投资建议：公司游戏+广告核心业务贡献稳定盈利以及现金流增长，公司维持AI 投入，微信生态具备长 期AI 发展潜力，有望成为AI 时代操作系统。我们预计2025-2027 年公司实现营收7504/8339/9111 亿元； 经调整归母净利润2589/2987/3199 亿元；对应PE 分别为21.1/18.4/17.2 倍，维持"买入"评级。 推出智 ...

Core Insights - The company reported Q3 2025 revenue of 192.9 billion yuan, a year-on-year increase of 15%, exceeding Bloomberg consensus expectations of 188.8 billion yuan [1] - Non-IFRS net profit attributable to the parent company reached 70.6 billion yuan, up 18.0% year-on-year, also surpassing Bloomberg consensus [1] - Overall gross margin improved to 56%, up 2.6 percentage points year-on-year, with various business segments showing increased margins [1] Revenue Breakdown - Domestic and international gaming revenue exceeded expectations, with total online gaming revenue at 63.6 billion yuan, a year-on-year increase of 22.8% [2] - Domestic gaming market revenue was 42.8 billion yuan, up 15% year-on-year, benefiting from the success of "Delta Action" and growth in evergreen games [2] - International gaming market revenue reached 20.8 billion yuan, a 43% increase year-on-year, driven by growth from Supercell games and "PUBG MOBILE" [2] Advertising and AI Impact - Advertising revenue grew to 36.2 billion yuan, up 21% year-on-year, benefiting from increased ad exposure and AI-driven ECPM growth [2] - The company enhanced AI applications in advertising creation, delivery, recommendation, and performance analysis, leading to improved click-through and conversion rates [2] Profit Forecast and Investment Rating - The company is expected to maintain strong performance with adjusted net profit forecasts of 255.5 billion yuan, 285.8 billion yuan, and 318.2 billion yuan for 2025-2027 [3] - Corresponding PE ratios (Non-IFRS) are projected at 21, 19, and 17 times for 2025-2027 [3] - The company maintains a "buy" rating due to its solid business barriers and strong ecosystem across gaming, social platforms, advertising, and fintech [3]

Macro Strategy - In 2026, the narrow deficit is expected to reach 5.94 trillion yuan, an increase of approximately 276.5 billion yuan year-on-year, while the broad deficit is projected to be 14.54 trillion yuan, up about 167 billion yuan year-on-year, with a broad deficit rate of approximately 9.8%, a slight decrease of 0.4 percentage points [1][13] - The total fiscal expenditure in 2026 is anticipated to be 43.54 trillion yuan, growing by 3.2% year-on-year, which is a slowdown compared to the previous year's growth rate [1][13] Foreign Trade - China's exports are expected to maintain strong resilience in 2026, with an annual growth rate of around 3%-4%, compared to an estimated 4.5%-5% in 2025 [2][14][15] - The impact of tariffs on exports is expected to ease, with the likelihood of large-scale tariff increases from the U.S. being relatively low [2][15] Industry Analysis - The 2025 Double Eleven sales event saw total e-commerce sales reach approximately 16,950 billion yuan, a year-on-year increase of 14.2%, with comprehensive e-commerce platforms accounting for 16,191 billion yuan, up 12.3% year-on-year [6] - The coal industry is projected to experience a weak equilibrium in supply and demand, leading to fluctuating coal prices in the first half of 2026, with a focus on high-dividend investment logic [7][8] Company Insights - Leap Motor's Q3 performance maintained positive profitability, with revised net profit forecasts for 2025-2027 being 700 million, 3.3 billion, and 6.8 billion yuan respectively, corresponding to PE ratios of 103, 21, and 11 times [9] - Geely's Q3 results met expectations, with an upward revision of the 2025 net profit forecast to 18.1 billion yuan, while the 2026 and 2027 forecasts were adjusted downwards to 19.5 billion and 27.2 billion yuan respectively [11] - Tencent's overall performance exceeded expectations, with adjusted net profit forecasts for 2025-2027 being 255.5 billion, 285.8 billion, and 318.2 billion yuan, maintaining a "buy" rating [12]

Investment Rating - The report maintains a "Buy" rating for Tencent Holdings [3][39] Core Views - The company continues to release strong performance and possesses significant business barriers. The integration of AI is enhancing the company's gaming and advertising business, leading to continuous breakthroughs in models and applications [3][39] - The overall ecosystem of the company remains robust, with revenue growth in online gaming, social platforms, advertising, and fintech [3][39] Summary by Sections 1. Revenue and Profit Performance - In Q3 2025, the company achieved total revenue of 192.9 billion yuan, a year-on-year increase of 15%, exceeding Bloomberg's consensus estimate of 188.8 billion yuan. Non-IFRS net profit reached 70.6 billion yuan, up 18% year-on-year, also surpassing expectations [9][14] - The overall gross margin for Q3 was 56%, an increase of 2.6 percentage points year-on-year [36] 1.1 Online Gaming Revenue - Q3 2025 online gaming revenue was 63.6 billion yuan, a year-on-year increase of 22.8%. Domestic gaming revenue was 42.8 billion yuan, up 15%, exceeding expectations [19][20] 1.2 Social Network Revenue - Q3 2025 social network revenue was 32.3 billion yuan, a year-on-year increase of 4.5%, driven by growth in mini-game platform service fees and paid membership revenues [23] 1.3 Advertising Revenue - Q3 2025 advertising revenue was 36.2 billion yuan, a year-on-year increase of 21%, benefiting from increased ad exposure and AI-driven improvements in ad effectiveness [25] 1.4 Fintech and Enterprise Services Revenue - Q3 2025 fintech and enterprise services revenue was 58.2 billion yuan, a year-on-year increase of 9.6%, supported by growth in consumer loan services and business payment activities [27] 2. User Engagement Metrics - The combined monthly active users (MAU) of WeChat reached 400 million, a year-on-year increase of 2%. QQ's mobile MAU was 517 million, down 8% year-on-year [30] 3. Margin Improvements - All business segments saw improvements in gross margins, with the advertising business achieving a gross margin of 57%, up 4.0 percentage points year-on-year [36] 4. AI Investment Impact - Increased investment in AI has led to higher sales and management expenses, with sales expenses rising to 11.5 billion yuan, up 22% year-on-year [37] 5. Earnings Forecast and Valuation - The report forecasts adjusted net profits of 255.5 billion yuan, 285.8 billion yuan, and 318.2 billion yuan for 2025, 2026, and 2027, respectively, with corresponding PE ratios of 21, 19, and 17 times [39]

Core Insights - The company reported Q3 2025 results with revenue of 192.9 billion yuan, a year-on-year increase of 15% and a quarter-on-quarter increase of 5%, exceeding consensus expectations of 188.8 billion yuan [1] - Gross profit reached 108.8 billion yuan, up 23% year-on-year and 4% quarter-on-quarter, also above the consensus estimate of 106.4 billion yuan [1] - Non-IFRS net profit attributable to shareholders was 70.6 billion yuan, reflecting an 18% year-on-year increase and a 2% quarter-on-quarter increase, surpassing the consensus forecast of 66 billion yuan [1] Business Segments Summary Online Gaming - Q3 2025 revenue from online gaming was 63.6 billion yuan, exceeding the consensus estimate of 60.4 billion yuan, with a year-on-year growth of 23% [1] - Domestic revenue grew 15% to 42.8 billion yuan, driven by the success of "Delta Operation" launched in September 2024, along with revenue growth from established titles like "Honor of Kings" and "Peacekeeper Elite" [1] - International gaming revenue surged 43% to 20.8 billion yuan, supported by growth from Supercell games and the recent acquisition of a game studio [1] Social Networking - Q3 2025 revenue from social networking was 32.3 billion yuan, a year-on-year increase of 5%, slightly below the consensus estimate of 32.8 billion yuan [2] - Growth was primarily driven by increases in music subscription services, video live streaming, and mini-game platform service fees [2] - Tencent Music's online music subscription business performed well, with paid users rising to 125.7 million, a 5.6% year-on-year increase [2] Marketing Services - Q3 2025 revenue from marketing services was 36.2 billion yuan, exceeding the consensus estimate of 35.6 billion yuan, with a year-on-year growth of 21% [2] - Growth was attributed to increased ad exposure, improved user engagement, and AI-driven optimization of ad placements [2] Financial Technology and Enterprise Services - Q3 2025 revenue from financial technology and enterprise services was 58.2 billion yuan, slightly above the consensus estimate of 58.1 billion yuan, with a year-on-year growth of 10% [2] - Financial technology revenue saw modest growth driven by commercial payments and consumer loans, while enterprise services benefited from increased demand for AI-related services [2] Operational Performance and Profitability - The company achieved a gross profit of 108.8 billion yuan in Q3 2025, a 23% year-on-year increase, supported by high-margin businesses and improved cost efficiency in cloud services [3] - Gross margin reached 56.4%, up 3.3 percentage points year-on-year and 0.1 percentage points quarter-on-quarter [3] - Non-IFRS net profit attributable to shareholders was 70.6 billion yuan, with a year-on-year increase of 18% [3] AI Developments - The company is actively expanding its AI capabilities across various sectors, including enhancing AI features in WeChat and integrating AI into enterprise WeChat [4] - AI is being utilized in game content creation and marketing strategies for popular titles [4] - The company is also enhancing AI applications in advertising, particularly in product recommendations and ad placement systems [4] Investment Outlook - The company maintains a "strong buy" investment rating, supported by robust core business performance and significant improvements in AI-driven efficiencies across various business lines [5] - Revenue projections for 2025-2027 are expected to reach 753.5 billion, 832.5 billion, and 907.7 billion yuan, with adjusted net profits of 260.2 billion, 293.6 billion, and 325.4 billion yuan respectively [5]

Core Viewpoint - Tencent Holdings reported Q3 2025 revenue of 192.9 billion yuan, a 15% year-on-year increase, exceeding Bloomberg consensus by 2% [1] - Adjusted net profit attributable to shareholders reached 70.6 billion yuan, up 18% year-on-year, surpassing consensus expectations by 7% [1] Group 1: Financial Performance - Gross profit growth rate (22%) outpaced adjusted operating profit growth (18%) and adjusted net profit growth (18%), while revenue growth was at 15% [1] - Revenue from value-added services and advertising exceeded expectations, with significant contributions from overseas gaming [1] - International and domestic game revenues grew by 43% and 15% year-on-year, respectively, with domestic game revenue maintaining a high level at 42.8 billion yuan [1] Group 2: Advertising and AI Integration - Advertising revenue grew by 21% year-on-year, driven by improved loading rates and AI-driven eCPM enhancements [2] - The launch of the intelligent advertising product matrix, Tencent Advertising AIM+, contributed to revenue growth [2] - Financial technology services revenue increased by 10%, supported by growth in commercial payments and consumer loan services [2] Group 3: Capital Expenditure and AI Development - Capital expenditure for Q3 2025 was 13 billion yuan, accounting for 6.7% of revenue, with a total of 59.6 billion yuan for the first three quarters, representing 10.7% of revenue [2] - Market pricing for Tencent's AI capabilities is considered insufficient, with advancements in complex reasoning and image generation models [2] Group 4: Future Outlook - The company raised its adjusted net profit forecasts for 2025-2027 to 260.2 billion, 300.7 billion, and 337.3 billion yuan, respectively [3] - The target price based on the SOTP valuation method is set at 791 HKD, indicating a potential upside of 23.4% [3]

Investment Rating - The investment rating for Tencent Holdings is "Buy" and is maintained [7]. Core Views - Tencent's Q3 2025 revenue reached 192.9 billion yuan, a year-on-year increase of 15% and a quarter-on-quarter increase of 5%. Operating profit was 63.6 billion yuan, up 19% year-on-year. Non-IFRS net profit attributable to shareholders was 70.6 billion yuan, an 18% increase year-on-year. Both revenue and adjusted net profit exceeded market expectations [2][4]. Revenue Breakdown - The revenue growth was driven by: 1. Strong performance from both new and existing games, with overseas game revenue and growth rates hitting record highs. Domestic game revenue grew 15% to 42.8 billion yuan, while overseas game revenue increased by 43% to 20.8 billion yuan, marking a record-breaking quarter [7]. 2. AI technology enhancements and strong internal demand led to accelerated growth in advertising revenue, which rose 21% year-on-year to 36.2 billion yuan [7]. 3. Recovery in commercial payments and AI-driven growth in cloud service revenue contributed to a 10% year-on-year increase in financial technology and enterprise service revenue, totaling 58.2 billion yuan [7]. R&D and Profitability - Tencent's R&D investment reached a record high, with Q3 R&D spending at 22.8 billion yuan, an increase of 28% year-on-year. The gross margin for Q3 was 56.4%, reflecting a year-on-year increase of 3.3 percentage points [7]. Capital Expenditure - Capital expenditure in Q3 decreased by 24% year-on-year to 13 billion yuan, accounting for approximately 10.7% of revenue for the first three quarters [7].

Core Insights - Tencent's Q3 2025 performance shows strong growth in both revenue and profit, driven by overseas gaming and marketing services [1] - The company continues to leverage AI technology to enhance advertising and e-commerce operations, improving efficiency and creating new opportunities [2] - The gaming segment exhibits robust performance from both new and existing titles, with a rich pipeline for future growth [3] Financial Performance - In Q3 2025, Tencent achieved revenue of 192.9 billion yuan (up 15% year-on-year, up 5% quarter-on-quarter) and net profit attributable to shareholders of 63.1 billion yuan (up 19% year-on-year, up 13% quarter-on-quarter) [1] - Non-IFRS net profit was 70.6 billion yuan (up 18% year-on-year, up 12% quarter-on-quarter) [1] - The gross margin increased by 3 percentage points year-on-year to 56%, driven by high-margin self-developed games and services [1] Business Segments - Value-added services revenue reached 95.9 billion yuan (up 16% year-on-year), with domestic gaming revenue at 42.8 billion yuan (up 15% year-on-year) and overseas gaming revenue at 20.8 billion yuan (up 43% year-on-year) [1] - Marketing services revenue was 36.2 billion yuan (up 21% year-on-year), benefiting from increased user engagement and AI-driven improvements in advertising efficiency [1] - Financial technology services revenue was 58.2 billion yuan (up 10% year-on-year), driven by growth in commercial payments and AI-related services [1] AI Technology Development - The company is continuously upgrading its AI models, with its latest image generation model ranking first globally as of November 12 [2] - New advertising products enhance marketing ROI and support small and medium-sized advertisers [2] - AI integration in e-commerce is boosting transaction volumes on platforms like WeChat [2] Gaming Performance - New games like "Delta Force" and "Valorant" are performing well, with "Valorant" achieving over 50 million monthly active users in China [3] - Established titles like "Honor of Kings" continue to show strong user engagement, with daily active users surpassing 139 million [3] - Upcoming game launches, including "Honor of Kings World" and "Honor of Kings Chess," are expected to drive further business growth [3]