Investment Rating - The report maintains a "Buy" rating for Tencent Holdings [5] Core Views - The report anticipates sustained growth in gaming and advertising revenues, driven by key titles such as "Honor of Kings World" and "Little People’s Country" contributing to revenue growth in 2026 [3][9] - The estimated IFRS net profit for 2025-2027 is projected at 226 billion, 261 billion, and 297 billion RMB respectively, reflecting adjustments based on updated assumptions for gaming, advertising, and payment services [3][9] - A sum-of-the-parts (SOTP) valuation method is used, resulting in a target price of 664.22 HKD [3][5] Financial Performance Summary - For 2023, the company reported revenue of 609,015 million RMB, with a year-on-year growth of 9.82% [4] - The operating profit for 2023 was 152,784 million RMB, showing a significant year-on-year increase of 52.76% [4] - The net profit attributable to shareholders for 2023 was 115,216 million RMB, reflecting a decline of 38.79% year-on-year [4] - The earnings per share (EPS) for 2023 is reported at 12.60 RMB [4] - The gross margin is expected to improve from 48.13% in 2023 to 57.90% by 2027 [4] Revenue Breakdown - The report highlights that the revenue from value-added services reached 959 billion RMB in Q3 2025, with a year-on-year growth of 16% [9] - Gaming revenue for Q3 2025 was 636 billion RMB, marking a 23% increase year-on-year [9] - Marketing services revenue for Q3 2025 was 362 billion RMB, exceeding Bloomberg's expectations by 2% [9] Future Projections - The report projects a revenue increase to 754,344 million RMB in 2025, with a year-on-year growth rate of 14.25% [4] - The operating profit is expected to reach 247,023 million RMB in 2025, with a growth rate of 23.45% [4] - The net profit attributable to shareholders is forecasted to be 225,981 million RMB in 2025, reflecting a growth of 16.44% [4]

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 efficiency, creating new opportunities [2] - The gaming segment exhibits robust performance with a rich pipeline of new and existing products, indicating strong future growth potential [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 of 42.8 billion yuan (up 15% year-on-year) and overseas gaming revenue of 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 capabilities, with its mixed Yuan image generation model ranking first globally as of November 12 [2] - New AI-driven advertising products enhance marketing ROI and support small and medium advertisers [2] - AI integration in e-commerce is boosting transaction volumes on WeChat, indicating a shift towards a more intelligent ecosystem [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 games like "Honor of Kings" continue to show strong engagement, with daily active users surpassing 139 million [3] - Upcoming major titles and expansions are expected to further drive business growth [3]

Core Insights - The 10th anniversary celebration of "Honor of Kings" took place in Chengdu, marking its significant impact on the global mobile gaming landscape [1][4] - The event featured numerous celebrities and performances, emphasizing the game's cultural significance and community engagement [1][3] - "Honor of Kings" aims to expand beyond gaming into a comprehensive IP universe, including animation, music, and film [4][5] Industry Trends - The mobile gaming industry has shifted from "light casual" games to more immersive experiences, with "Honor of Kings" leading this transformation since its launch in 2015 [2][3] - The game has successfully integrated social features, achieving a record of 7.5 million daily active users (DAU) shortly after its release [3] - The game's DAU reached 139 million in 2025, while global monthly active users (MAU) surpassed 260 million, setting a new record for mobile games [6][7] Brand Collaborations - "Honor of Kings" has partnered with over 60 brands across various sectors, including fashion and beverages, to create co-branded products, enhancing its cultural relevance [7][8] - The collaboration with Estée Lauder targets a predominantly female audience, while partnerships with brands like iQOO focus on male gamers interested in esports [8] Cultural Impact - The game has become a significant cultural phenomenon in China, with its influence extending into tourism and local economies, as seen in the "Follow the Kings to Explore Chengdu" initiative [8][9] - "Honor of Kings" has launched over 50 skins related to traditional culture, appealing to younger audiences' desire for deeper cultural engagement [10][11] - The game is increasingly recognized as a vital part of China's cultural strategy, with educational initiatives and government support for the gaming industry [11]

Core Insights - Tencent's mobile game "Honor of Kings" has achieved a record-breaking 139 million daily active users (DAU) in China and over 260 million monthly active users (MAU) globally by 2025, surpassing its previous forecast of 100 million DAU for 2024 [1][3] - The game has also set a new global record for monthly active users among gaming products [3] - Upcoming IP derivative games include "Honor of Kings: Chess of the Kings" and "Honor of Kings: World," with the latter expected to launch in Spring 2026 and featuring advanced technologies like ray tracing and NVIDIA's DLSS3 [3][4] - A new animated series focusing on the character "Li Xin" has been announced, with additional series in development, indicating a strong expansion of the game's IP into multimedia [4][5] User and Revenue Growth - Since its launch in October 2015, "Honor of Kings" has seen rapid user growth, reaching 200 million registered users within a year [7] - The Chinese gaming market has grown significantly, with user numbers increasing from 534 million in 2015 to 664 million in 2022, and market revenue rising from 140.7 billion RMB to 265.88 billion RMB in the same period [7] - The gaming industry in China is projected to exceed 325.78 billion RMB in 2024, with a year-on-year growth of 7.53%, accounting for approximately 26.7% of the global gaming market [7] - In 2023, "Honor of Kings" generated significant revenue, with Tencent's domestic gaming revenue reaching 40.4 billion RMB, a 17% increase year-on-year, and the game being the only mobile game to surpass $1 billion in revenue in the first half of the year [8] - "Honor of Kings" has maintained its position at the top of the Chinese App Store revenue rankings for 14 consecutive months and achieved the second-highest single-month revenue in gaming history [8]

Core Insights - The core point of the articles is the celebration of the 10th anniversary of "Honor of Kings," highlighting its significant user engagement and the successful events surrounding the anniversary celebration [2][4][6]. User Engagement - The game has achieved a domestic daily active user count (DAU) of 139 million and a global monthly active user count (MAU) exceeding 260 million [2][4]. - The anniversary celebration included various interactive activities, showcasing the game's strong community engagement and the enthusiasm of esports fans [6]. Financial Performance - Tencent's Q2 2025 financial report noted that "Honor of Kings" and other evergreen games contributed to a 17% year-on-year increase in domestic game revenue, reaching 40.4 billion yuan [6]. - The game has maintained its position at the top of the Chinese App Store's mobile game revenue chart for 14 consecutive months, and it achieved the second-highest single-month revenue in its history earlier this year [6]. New Game Releases - Two new games based on the "Honor of Kings" IP, "Honor of Kings World" and "Honor of Kings Chess," were showcased at the anniversary event [7]. - "Honor of Kings World" is an open-world game set to be released in spring next year, allowing players to choose between single-player and multiplayer modes while integrating original characters [8]. - "Honor of Kings Chess" is a strategy-based auto-chess mobile game that emphasizes character development and features visually appealing 3D models and animations [8].

Core Insights - The event "Co-creation Night" for the 10th anniversary of "Honor of Kings" was held in Chengdu, revealing that the domestic daily active users surpassed 139 million and global monthly active users exceeded 260 million, indicating a new phase in the game's development and reflecting the rapid growth of China's digital cultural industry over the past decade [2][3] Group 1: Game Development and User Engagement - Since its launch in 2015, "Honor of Kings" has rapidly gained popularity, achieving over 10 million daily active users within two months of its public release and reaching 100 million daily active users in 2020 [2] - The game has become a cultural phenomenon, coinciding with the golden decade of mobile internet in China, where the number of 4G users surpassed 350 million and mobile internet traffic doubled, providing a fertile ground for mobile gaming [2] - The game has played a significant role in the popularization of esports in China, with the esports industry revenue reaching 26.3 billion yuan in 2023, of which mobile esports accounted for over 58% [3] Group 2: Cultural Integration and Content Expansion - "Honor of Kings" has explored the digital expression of traditional culture, launching over 50 traditional culture-themed skins since 2018, which have reached over 100 million users and revitalized multiple cultural heritage sites [3][4] - The IP content of "Honor of Kings" continues to expand, with new projects like "Honor of Kings World" and a 3D animated series, creating a diverse content matrix that integrates the game into daily life and serves as a cultural identity for young people [4] - The 10th anniversary celebration in Chengdu attracted over 800,000 visitors, showcasing the game's ability to stimulate local economic activity through cultural tourism integration [4][5] Group 3: Industry Leadership and Global Positioning - The success of "Honor of Kings" and other self-developed games has positioned China from being a "follower" to a "leader" in the global gaming industry, with Chinese companies holding 38 positions in the top 100 mobile game developers worldwide [5]

Core Viewpoint - Century Huatong has emerged as a significant player in the gaming industry, with its subsidiary, Diandian Interactive, surpassing major competitors like NetEase and miHoYo in global mobile game revenue, primarily due to its unique game offerings and strategic market positioning [1][6]. Group 1: Company Performance - Diandian Interactive distributed approximately 600 million yuan among 27 employees this year, showcasing its financial success [1]. - From June 2023, Diandian Interactive's global mobile game revenue exceeded that of NetEase, securing the second position in the industry, only behind Tencent [1]. - The flagship games, "Whiteout Survival" and "Kingshot," have generated cumulative revenues of over $3.3 billion and $300 million, respectively [5]. Group 2: Market Strategy - Diandian Interactive has focused on niche markets, developing games in less competitive segments, such as survival strategy and shooting card games, which has allowed it to capture player interest without facing intense competition [4][7]. - The company has successfully localized its games to cater to regional player preferences, enhancing user engagement and retention [4][5]. Group 3: Competitive Landscape - The gaming industry is witnessing an influx of competitors attempting to replicate Diandian Interactive's success, particularly in the survival strategy genre, which may increase customer acquisition costs for the company [7][10]. - Major players like Tencent are also entering the same market segments, intensifying competition and potentially impacting Diandian Interactive's market share [10][8]. Group 4: Future Initiatives - Diandian Interactive is actively working on retaining existing players through updates and enhancements to current games, while also exploring new game genres and integrating AI technologies to improve game development efficiency [11][12]. - The company is expanding its workforce, particularly targeting experienced talent from larger firms, indicating a commitment to growth and innovation [12].

Core Insights - The 2025 Cologne International Game Show will take place in Cologne, Germany, from August 20 to 24, and is recognized as Europe's largest and most authoritative interactive entertainment exhibition, focusing on game hardware, software, technology, and related content [1][3] Group 1: Exhibition Overview - The event attracted 1,500 exhibitors from 72 countries and regions, marking an 11% increase from the previous year, setting a historical record for the Cologne International Game Show [4] - The exhibition area reached a record 233,000 square meters, featuring various segments including interactive gaming experiences, cosplay performances, independent games, card games, artist zones, and merchandise sales [9] Group 2: Chinese Participation - Over 50 Chinese exhibitors participated, a 32% increase from last year, showcasing new titles such as Tencent's "Honor of Kings World," "Delta Action," and "Crossfire: Rainbow" [13] - The presence of Chinese games in Europe has significantly increased, with Germany being the largest game market in Europe, housing approximately 37.5 million gamers [17] Group 3: Awards and Recognitions - The mobile game "Love and Deep Space" by Paper Games won the Best Mobile Game award, becoming the first female-oriented game to achieve this honor at the Cologne Game Show [19] - Other notable nominations included "Genshin Impact" and "Tomorrow's Ark" for Best Mobile Game, and "Shadow Blade Zero" for Best Sound Effects [24][26] Group 4: Major Game Releases and Innovations - Tencent's TiMi Studio Group showcased several titles, including "Delta Action," which announced cross-platform support for PC, mobile, and console [26] - The new game "Black Myth: Zhong Kui" was unexpectedly revealed, focusing on a new hero and gameplay, although its release is projected to be three years away [29] Group 5: Japanese Dominance - Japanese companies excelled at the event, with Capcom winning multiple awards for "Resident Evil 9: Requiem," including Best Visual Effects and Best PlayStation Game [42] - Nintendo also received accolades for innovative gameplay with "Donkey Kong: Banana Power" and topped the Switch 2 sales chart with "Mario Kart: World" [46]

Group 1 - The Gamescom 2023, the largest gaming exhibition globally, opened in Cologne, Germany, with over 1,500 exhibitors from 72 countries, marking an 11% increase from last year [1] - More than 50 Chinese companies participated, including Tencent, MiHoYo, and others, representing a 32% increase in participation compared to the previous year [1] - The event featured the debut of the game "Black Myth: Wukong," which received enthusiastic applause during the Opening Night Live [1] Group 2 - Chinese companies, led by Tencent, have become key players at the Gamescom, with numerous booths attracting international gamers [2] - Tencent's VISVISE, an AI-driven creative solution for game art production, was globally unveiled at the event, covering various aspects of game development [2] - The presence of Chinese gaming companies is increasingly significant in the global gaming industry, contributing to industry advancements and becoming essential participants [2]

Core Insights - Tencent's "Honor of Kings World" was showcased at the 2025 Cologne Game Show, with a new trailer released [1] - The game is developed by Tencent's TiMi Studio and offers players an immersive experience beyond the traditional "Honor of Kings" universe [4] Group 1 - The game will be available for exploration at the Cologne Game Show from August 20 to August 24 [4] - Players will enter a vast world where they can experience the lives of familiar heroes and engage in various adventures [4] - The game emphasizes both combat and leisure activities, allowing players to explore diverse interests and experiences [4]