Core Insights - Tencent reported a revenue of 184.5 billion yuan for Q2 2025, representing a year-on-year growth of 14.5% driven primarily by advertising and gaming sectors [1] - Adjusted operating profit for Q2 2025 was 69.2 billion yuan, up 18% year-on-year, while non-IFRS net profit reached 63 billion yuan, reflecting a 10% increase [1] - The company’s comprehensive gross margin improved to 57%, a 4 percentage point increase year-on-year, with notable improvements in gross margins across value-added services, online advertising, and fintech services [1] Revenue Breakdown - Online gaming revenue for Q2 2025 was 59.2 billion yuan, showing a robust year-on-year increase of 22%, with domestic gaming revenue rising 17% to 40.4 billion yuan [2] - International gaming revenue surged by 35% to 18.8 billion yuan, driven by strong performances from titles like VALORANT and PUBG MOBILE [2] - The deferred revenue at the end of Q2 2025 stood at 120.9 billion yuan, marking a 13% year-on-year increase [2] Advertising and Fintech Performance - The company’s online advertising revenue reached 35.8 billion yuan in Q2 2025, reflecting a 20% year-on-year growth, attributed to higher click-through rates from AI deployment [3] - Fintech and enterprise services revenue grew by 10% year-on-year to 55.5 billion yuan, with commercial payment services and consumer credit driving growth [3] - Cloud service revenue is estimated to have increased by 17% in Q2 2025, benefiting from AI-related service demands [3] Future Outlook - The company is well-positioned for future growth, particularly in areas like WeChat e-commerce and AI applications, which are not fully reflected in current profit forecasts [4] - Projected adjusted net profits for 2025, 2026, and 2027 are 258.7 billion yuan, 296 billion yuan, and 335.2 billion yuan respectively, with slight upward adjustments [4] - Tencent's ecosystem continues to leverage its user and scenario advantages, positioning it as a leading player in the AI era [4]

Investment Rating - The investment rating for Tencent Holdings is "Outperform the Market" [4][34]. Core Insights - Tencent's revenue grew by 15% year-on-year, with adjusted profit increasing by 10%. In Q2 2025, Tencent achieved revenue of 184.5 billion yuan, a year-on-year increase of 14.5%, primarily driven by advertising and gaming businesses. The adjusted operating profit for Q2 2025 was 69.2 billion yuan, up 18% year-on-year [1][10]. - The company is optimistic about the integration of AI applications within its ecosystem, enhancing user experience and driving growth in social e-commerce [2][19]. - The gaming segment saw a 22% year-on-year increase in revenue, with domestic game revenue rising by 17% to 40.4 billion yuan, supported by strong contributions from self-developed games [3][22][26]. - Advertising revenue reached 35.8 billion yuan, reflecting a 20% year-on-year growth, attributed to higher click-through rates from AI deployment and improved transaction activities [4][31]. - Financial technology and enterprise services returned to double-digit growth, with revenue increasing by 10% to 55.5 billion yuan, driven by commercial payment services and consumer credit services [4][32]. Summary by Sections Financial Performance - In Q2 2025, Tencent's total revenue was 184.5 billion yuan, a 14.5% increase year-on-year, with adjusted operating profit at 69.2 billion yuan, up 18% year-on-year. The non-IFRS net profit was 63 billion yuan, reflecting a 10% increase [1][10][11]. - The overall gross margin improved to 57%, up 4 percentage points year-on-year, with specific segments like value-added services and financial technology showing significant margin improvements [11][34]. Gaming Business - The gaming revenue for Q2 2025 was 59.2 billion yuan, a 22% increase year-on-year. Domestic market revenue rose by 17% to 40.4 billion yuan, driven by popular titles like "Delta Action" and "Honor of Kings" [3][22][26]. - International gaming revenue grew by 35% to 18.8 billion yuan, with strong performances from titles like "VALORANT" and "PUBG MOBILE" [3][22][27]. Advertising and Marketing Services - The advertising revenue for Q2 2025 was 35.8 billion yuan, a 20% increase year-on-year, primarily due to enhanced click rates from AI and improved transaction activities through WeChat [4][31]. - The company noted that the current loading rate for video accounts is relatively low, indicating potential for future growth in advertising monetization [31]. Financial Technology and Enterprise Services - Financial technology and enterprise services revenue grew by 10% to 55.5 billion yuan, with a notable recovery in growth rates. The cloud service revenue is estimated to have increased by 17% in Q2 2025 [4][32][34].

Group 1 - ChinaJoy has evolved from a gaming-centric event to a multi-faceted entertainment platform, attracting various industries to engage with young audiences [1][2][5] - The event features 743 participating companies, including 237 foreign firms from 37 countries, highlighting the global interest in the Chinese digital entertainment market [5] - The gaming industry in China is experiencing a resurgence, with a projected actual sales revenue of 168 billion yuan for the first half of 2025, marking a 14.08% year-on-year increase [5] Group 2 - The presence of hardware manufacturers is increasing at ChinaJoy, with companies like BYD showcasing themed vehicles, indicating a shift towards a more diverse exhibition [6][12] - The integration of AI and smart technologies is becoming prominent, with various companies showcasing their innovations, reflecting a trend towards artificial intelligence in the entertainment sector [7][12] - The event serves as a platform for both domestic companies to expand internationally and for foreign firms to enter the Chinese market, demonstrating a "two-way" globalization trend in the gaming industry [12] Group 3 - Major gaming companies like NetEase and Tencent are showcasing a variety of interactive experiences, with Tencent presenting 17 game products, indicating a focus on immersive storytelling and user engagement [13][14] - The collaboration between classic IPs and new game releases is evident, with innovative crossovers attracting significant player interest, showcasing the industry's creative potential [14][17] - ChinaJoy is positioned as a barometer for industry trends, reflecting the ongoing transformation of the gaming landscape as it adapts to new technologies and consumer preferences [17]

Group 1 - The 22nd ChinaJoy was held from August 1 to 4 at the Shanghai New International Expo Center, with Tencent Games showcasing 17 products, occupying nearly half of the N4 hall [1] - Tencent Games' theme for this year's event was "COOL Goose Summer Camp," focusing on enhancing product experience and booth services, featuring over ten gameplay categories and popular new titles like "Runeterra: League of Legends Card Battle" and "Dance Party: Party" [1][2] - Interactive activities such as esports events and challenge games were added to various product booths, providing an immersive experience for attendees [1] Group 2 - Tencent's popular MOBA game "Honor of Kings" and Supercell's well-known titles like "Clash of Clans" and "Clash Royale" were featured, covering strategy, light competition, and simulation genres [3] - The independent exhibition area included large-scale trial activities for three DNF IP products and other titles, attracting a diverse audience of mobile, tabletop, and console gamers [3] - Supercell presented seven games in a unique "Supercell Trendy Game Street" at the event, celebrating the 13th anniversary of "Clash of Clans" with special activities and inviting popular KOLs for player engagement [4] Group 3 - "MapleStory: Legend of Maple" celebrated its 2nd anniversary with a themed event, while "Wild Origin" featured a "Wild Evolution Station" inviting well-known cosplayers and content creators for interactive experiences [4] - Tencent and Ubisoft collaborated to launch the first motion-sensing dance mobile game "Dance Party: Party," which was showcased at the event with performances by popular KOLs [4]

Core Insights - Supercell's game "Clash Royale" has seen a significant resurgence in revenue, reaching $27.7 million in May 2023, a 46% year-over-year increase, and hitting a new monthly high of $37 million in June 2023 [3][5] - The game's daily active users (DAU) have surged, placing it among the top three globally, surpassing other Supercell titles like "Clash of Clans" and "Brawl Stars" [5][6] - Supercell's recent success is attributed to a shift in operational strategy, focusing on player experience and innovative gameplay, rather than solely relying on new game releases [6][19] Revenue Growth - "Clash Royale" achieved a monthly revenue of $27.7 million in May 2023, marking a 46% increase compared to the previous year [3] - In June 2023, the game's revenue further increased to $37 million, indicating a strong upward trend [3] - The game set a new daily revenue record of $3.8 million on July 8, 2023, following the introduction of a new game mode [5] Operational Strategy - Supercell has implemented significant changes in "Clash Royale," including removing barriers to player rewards and enhancing gameplay experiences [9][10] - The company has expanded its operational teams to focus on long-term game development and user retention, moving away from its traditional small team model [18][19] - Supercell's collaboration with popular streamers has also contributed to the game's renewed popularity, with notable streamers driving engagement and player interest [14][15] Market Position - Supercell's revenue has faced challenges, with a reported decline of over 4% year-over-year in 2023, prompting the need for strategic changes [18] - The company has restructured its management approach, dividing teams into those focused on new game development and those dedicated to enhancing existing titles [18][19] - The shift in strategy has resulted in a notable increase in user engagement and revenue for older titles, indicating a successful adaptation to market demands [19][23]

Group 1: Domestic and Imported Games Approval - The National Press and Publication Administration approved 130 domestic games and 14 imported games in May, indicating continued regulatory support for the gaming industry [1] - Among the approved domestic games, Perfect World's "Yihuan" received licenses for mobile, PC, and console platforms (PS5), showcasing the potential for multi-platform success [1] - The approval of new games is expected to boost market confidence in leading gaming companies and positively impact the gaming sector [1] Group 2: Netflix's Adaptation of "Clash of Clans" - Netflix announced the adaptation of the popular mobile game "Clash of Clans" by Finnish company Supercell into an animated series, marking a strategic move to explore new content formats [2] - This initiative may attract more subscribers to the streaming platform and positively influence both the gaming and film sectors [2] - The adaptation reflects a growing trend of cross-industry collaboration, enhancing market expectations for integrated content [2] Group 3: Relaunch of "Shining! Youthful Girls" - The Chinese version of "Shining! Youthful Girls," based on "Uma Musume," will reopen its download portal after a nearly one-year hiatus, indicating a strategic shift in its operational approach [3] - The game underwent a version update with changes to UI, text, illustrations, and scenes, aiming to attract returning players [3] - This relaunch is likely to strengthen market confidence in the niche of 2D games and enhance expectations for refined game operations [3]

Core Viewpoint - Ubisoft is splitting its successful IP series and development teams into a subsidiary valued at approximately €4 billion ($4.3 billion), with Tencent investing €1.16 billion for a 25% stake, leading to a 14.7% increase in Ubisoft's stock price post-announcement [2]. Group 1 - The subsidiary will include major IPs such as Assassin's Creed, Rainbow Six, and Far Cry, with Tencent's investment likely resulting in the integration of Ubisoft's Shanghai and Chengdu studios into Tencent's ecosystem [2][4]. - Tencent's initial investment in Ubisoft occurred in March 2018, acquiring 5% of shares for €369 million, and has since increased its stake to 9.99% through a €300 million investment in September 2022 [3]. - The current restructuring is seen as a response to Ubisoft's declining valuation and the lack of blockbuster releases, with the company facing significant challenges in the gaming market [3][4]. Group 2 - Despite Ubisoft's reputation in the gaming industry, its core IPs, including Assassin's Creed, are considered less commercially viable compared to top-tier IPs like Pokémon and Harry Potter, which may limit their value in Tencent's portfolio [4]. - The integration of Ubisoft's development teams into Tencent poses challenges due to cultural differences in game development between Western and Chinese companies, raising questions about talent transition and operational compatibility [5]. - The restructuring is viewed as a practical solution to address the potential mismatch between Ubisoft's AAA game development and Tencent's business model focused on service-oriented games [5].

大手笔来了。 作者 | 王露 报道 | 投资界PEdaily 3 月 27 日 ， 育 碧 宣 布 成 立 一 家 新 的 游 戏 子 公 司 ， 引 入 腾 讯 11.6 亿 欧 元 （ 约 90 亿 元 人 民 币）战略投资。 游戏玩家们对育碧一定不陌生，创造经典信仰之跃的《刺客信条》、聚会必备游戏《舞 力 全 开 》 、 当 年 的 显 卡 杀 手 《 孤 岛 惊 魂 》 …… 成 立 于 1 9 8 6 年 的 育 碧 ， 凭 借 多 款 经 典 游 戏，被玩家称为"育碧我大哥"。 如今的育碧却不见昔日辉煌——玩家不满、股价暴跌，私有化的消息甚嚣尘上。最终， 还是老朋友腾讯拉了育碧一把。 腾讯注资的11. 6亿欧元，将用于强化育碧的资产负债表，包括偿还集团债务和辅助新公 司的运营； 育碧将保留子公司100%的创意控制权、IP所有权和商业决策权，仅向子公司授予"全球 独家永久IP授权"以换取特许权使用费； 腾讯获得一名无表决权的董事会观察员席位，并享有对重大资产处置的否决权，但不会 干涉公司运营。 国内玩家对于育碧并不陌生。1986年，Guill emot五兄弟创立育碧。一路走来，凭借精 品主机游戏，被 ...

Core Viewpoint - The article discusses Tencent's recent financial performance and strategic direction in the gaming industry, highlighting its growth in both domestic and international markets, as well as its focus on long-lasting games and internal restructuring to enhance operational efficiency [2][3][10]. Group 1: Financial Performance - In Q4 2024, Tencent reported revenue of 1724.5 billion RMB, a year-on-year increase of 11%, with adjusted net profit rising by 30% to 553.1 billion RMB [2]. - For the full year 2024, Tencent achieved total revenue of 6602.57 billion RMB, up 8% year-on-year, and net profit of 1940.73 billion RMB, reflecting a 68% increase [2]. - The gaming segment generated revenue of 492 billion RMB in Q4 2024, with domestic gaming revenue growing by 23% to 332 billion RMB and international revenue increasing by 15% to 160 billion RMB [5]. Group 2: Gaming Business Growth - In 2024, Tencent's total gaming revenue reached 1977 billion RMB, a 9.9% year-on-year increase, with domestic revenue at 1397 billion RMB (10% growth) and international revenue at 580 billion RMB (9% growth) [6]. - Key contributors to domestic growth included titles like "Valorant," "Naruto," "Teamfight Tactics," and "League of Legends Mobile," along with new revenue from "Dungeon & Fighter: Origin" and "Delta Force" [6]. - The game "Teamfight Tactics" maintained strong growth, with Q4 revenue increasing by 30% year-on-year, achieving double-digit growth for eight consecutive quarters [6]. Group 3: Strategic Initiatives - Tencent's "Evergreen Game" strategy, which focuses on games with annual revenue exceeding 4 billion RMB and high daily active users, has expanded from 12 to 14 titles [11]. - The company is restructuring its internal organization to enhance operational efficiency and focus on long-lasting games, with adjustments made to various departments [13][14]. - Tencent's gaming division has seen a rise in daily active users for its top five games during the recent Spring Festival compared to the previous year, indicating increased popularity [14]. Group 4: International Market Performance - Tencent's international gaming revenue growth was driven by strong performances from "PUBG MOBILE" and Supercell games, with Supercell reporting a total revenue of 2.8 billion euros (approximately 3 billion USD) in 2024, a 77% year-on-year increase [9]. - The acquisition of Supercell nine years ago for 8.6 billion USD has laid a solid foundation for Tencent's subsequent international expansion [9]. Group 5: Social Network and Other Business Growth - Tencent's social network business, including music streaming and video services, saw a 2% revenue increase due to growth in mini-game platform service fees and mobile game in-app purchases [15]. - The number of paid members for Tencent Video reached 113 million, maintaining its leading position in China's long video market, while Tencent Music's subscription revenue grew by 25.9% to 15.23 billion RMB [15].