Investment Rating - The report provides a positive outlook on Tencent Holdings (700.HK) with a focus on its advancements in AI and network technology [9]. Core Insights - Tencent has upgraded its self-developed high-performance computing network, Starry Sky Network 2.0, which has improved communication efficiency by 60% and enhanced large model training efficiency by 20% [9]. - The company is set to launch 35 new mobile games in July, with 21 already scheduled, indicating a strong product pipeline [9]. - Tencent has initiated the "Exploration Plan 2024," aimed at leveraging technology to support cultural heritage, showcasing its commitment to social value investment [9]. Summary by Sections Company Overview - Tencent's market capitalization stands at 34,537 billion HKD, with a current share price of 369 HKD [9]. - The total share capital is 9.355 billion shares, with a book value per share of 89.7 HKD [9]. Product Development - The upgraded Starry Sky Network 2.0 supports over 10,000 cards and is designed to enhance AI model training efficiency [9]. - Tencent has three new game products scheduled for release in July, including "Need for Speed: Unbound" and "World Awakening" [9]. Strategic Initiatives - The "Exploration Plan 2024" focuses on six cultural heritage themes and aims to gather digital solutions to promote cultural transmission [9]. - Tencent Classroom will cease operations on October 1, 2024, as part of a strategic adjustment in response to industry trends [9].

Investment Rating - The report maintains a "Buy" rating for the company, indicating a strong expectation of performance exceeding the market by over 20% [15][25]. Core Insights - The first month revenue of the "DNF Mobile Game" exceeded expectations, with projections suggesting an annual revenue of approximately 25 billion RMB [5]. - The report anticipates an increase in profit margins due to the removal of certain Android applications, allowing for lower user acquisition costs through alternative channels [4]. - The target price has been adjusted from 471 HKD to 473 HKD, reflecting a 26% upside potential based on revised profit forecasts [15]. Financial Projections - Revenue is projected to grow from 554.55 billion RMB in 2022 to 787.65 billion RMB by 2026, with a compound annual growth rate (CAGR) of approximately 9.4% [24]. - Non-IFRS net profit is expected to rise from 115.65 billion RMB in 2022 to 258.91 billion RMB in 2026, indicating a significant growth trajectory [24]. - The report highlights a projected increase in earnings per share (EPS) from 12.1 RMB in 2022 to 27.7 RMB in 2026 [24]. Market Position and Strategy - The company is focusing on enhancing its video platform and AI capabilities, with expectations for video advertising and e-commerce to drive future revenue growth [6]. - The strategic adjustments in the WeChat video platform are expected to improve monetization opportunities [6]. Competitive Landscape - The report notes that the gaming sector, particularly with titles like "Peacekeeper Elite" and "Honor of Kings," continues to show strong performance, validating the long-term operational strategies [5]. - The company is also exploring new game releases in the latter half of the year, which could further bolster its market position [5].

Investment Rating - The report does not explicitly state an investment rating for Tencent Holdings (700.HK) [2]. Core Insights - Tencent's mobile game "Dungeon & Fighter: Origin" has been removed from several Android app stores due to contract expiration, impacting its distribution [2]. - The game has performed exceptionally well in the iOS market, ranking first in downloads since its pre-download launch on May 20, with over 4 million downloads in May alone [2]. - Tencent's mobile gaming revenue increased by 12% in May, driven by the success of "Dungeon & Fighter: Origin" and other titles [2]. - Tencent's esports division is expanding its international cooperation network, launching a global esports exchange program starting in August in regions like Saudi Arabia, France, and Japan [2]. - In June, 104 domestic online games received approval, including Tencent's "Rock Kingdom: World," which is currently in development [2]. Summary by Sections Company Overview - Tencent Holdings has a market capitalization of HKD 35,764 billion and a total share capital of 9.362 billion shares [2]. - The stock price is currently at HKD 382, with a 52-week high of HKD 400.2 and a low of HKD 256.8 [2]. Gaming Performance - "Dungeon & Fighter: Origin" has surpassed revenue records, achieving over USD 100 million in just 10 days post-launch, ranking 8th in revenue [2]. - The game has outperformed "Honor of Kings" and "Peacekeeper Elite" in terms of revenue growth [2]. Esports Development - Tencent esports is set to host a series of international exchange events aimed at fostering collaboration within the global esports community [2]. Regulatory Updates - The National Press and Publication Administration approved 104 games in June, including Tencent's upcoming title [2].

Investment Rating - The report maintains a "Buy" rating for Tencent Holdings with a target price of HKD 507.55 per share [56][76] Core Views - Tencent's strategy focuses on high-quality growth, with key investments in overseas gaming, short video, and enterprise services since 2021 [89] - The company's core businesses remain stable, while new growth drivers such as video accounts and mini-games are emerging, contributing to mid-term performance growth [89] - Long-term growth is expected from generative AI investments, which are exploring new user scenarios and technological advancements [89] Financial Projections - Revenue is projected to reach RMB 658.9 billion in 2024 and RMB 726.1 billion in 2025, representing year-on-year growth of 8% and 10%, respectively [4][76] - Adjusted net profit attributable to shareholders is expected to grow by 29% in 2024 and 14% in 2025, reaching RMB 203 billion and RMB 231.2 billion, respectively [32][76] - Gross margin is forecasted to improve to 52.8% in 2024 and 53.2% in 2025, driven by higher-quality business streams [32] Business Segments Gaming - Domestic gaming revenue reached RMB 126.7 billion in 2023, up 2% YoY, while overseas gaming revenue grew 14% YoY to RMB 53.2 billion [74] - Tencent's overseas gaming investments have been a key focus since 2021, with contributions to overall gaming revenue steadily increasing [74] - The company plans to launch new games, such as "Dungeon & Fighter: Origin," which is expected to drive growth in 2024 [88] Financial Technology - WeChat Pay's revenue growth is closely tied to the overall mobile payment market, which saw transaction volume increase by 16.81% YoY to 1.851 trillion transactions in 2023 [2] - Non-payment businesses, such as credit and wealth management services, have significant growth potential, with WeBank playing a key role in expanding these services [8][10][119] Advertising - Advertising revenue is expected to grow by 19% in 2024 and 16% in 2025, driven by inventory expansion on WeChat, video accounts, and mini-games [40] - Video accounts' total viewing time grew by 100% YoY in 2023, with further growth of 80% YoY in Q1 2024, providing strong monetization opportunities [17] Enterprise Services - Tencent's enterprise services are benefiting from the growth of video accounts and mini-programs, with live-streaming e-commerce and technical service fees contributing to revenue [38] - The company is also investing in generative AI, which is expected to enhance SaaS tool efficiency and create new revenue streams in the medium to long term [152] Valuation - Using the SOTP valuation method, Tencent's core businesses are valued at HKD 4.26 trillion, with gaming and advertising contributing HKD 1.56 trillion and HKD 1.23 trillion, respectively [83] - The company's secondary market investments are valued at HKD 494.7 billion, contributing HKD 52.84 per share to the total valuation [135] Strategic Investments - Tencent has made significant investments in overseas gaming companies, including Riot Games, Supercell, and Epic Games, which have contributed to its global gaming presence [108][110] - The company is also investing in generative AI, with its Hunyuan large model and Tencent Yuanbao AI assistant launched in 2023 and 2024, respectively [132]

Investment Rating - The report maintains an "Outperform the Market" rating for Tencent Holdings [14][36][21] Core Insights - The removal of DNF mobile game from certain Android app stores is expected to enhance profit margins for Tencent, as it reduces channel sharing costs [12][18] - DNF mobile game has shown strong performance, topping the iOS sales chart for 31 consecutive days and achieving an estimated revenue of 5 billion yuan in its first month [13][29] - The gaming industry is transitioning from a "channel-driven" model to a "content-driven" model, with high-quality content becoming the key to attracting players [13][25] Summary by Sections Company Overview - Tencent's DNF mobile game has successfully transitioned to a direct download model, avoiding high channel fees associated with traditional Android app stores [11][12] - The game has outperformed major competitors, generating significant revenue shortly after launch [13][29] Market Dynamics - The Android gaming market is characterized by high revenue sharing costs, with major manufacturers like Huawei, OPPO, and Vivo setting a 50% revenue share for developers [3][12] - The trend of avoiding traditional app stores is gaining traction, as evidenced by other successful games like Genshin Impact, which also opted out of certain Android channels [27][25] Financial Projections - The report projects Tencent's adjusted net profits for 2024, 2025, and 2026 to be 229.9 billion, 257.9 billion, and 279.9 billion yuan respectively, reflecting an upward adjustment in profit expectations [14][36] - The anticipated growth in revenue is supported by the strong performance of new game titles and the company's ability to leverage its existing IPs [14][36]

Investment Rating - The investment rating for Tencent Holdings (0700.HK) is "Buy" [2]. Core Insights - Tencent reported a revenue of 159.5 billion yuan for Q1 2024, representing a year-over-year increase of 6%. Gross profit reached 83.9 billion yuan, up 23% year-over-year, with a gross margin of 52.6%. Net profit attributable to shareholders was 41.9 billion yuan, reflecting a 62% year-over-year increase [2][4]. Summary by Sections Business Performance - Value-added services generated revenue of 78.6 billion yuan, down 1% year-over-year. Social network revenue decreased by 2% to 30.5 billion yuan, primarily due to declines in music and long video subscriptions, although revenue from video live streaming and mini-games increased. Domestic game revenue fell by 2% to 34.5 billion yuan, impacted by declines in "Honor of Kings" and "Peacekeeper Elite," but offset by strong growth from new games. International game revenue grew by 3% to 13.6 billion yuan, with a 34% increase in gross revenue [2][4][5]. Advertising and E-commerce - Online advertising revenue increased by 26% year-over-year to 26.5 billion yuan, driven by enhanced user engagement and AI-driven advertising infrastructure. Video account advertising revenue more than doubled, benefiting from increased video views and click-through rates. E-commerce revenue from video accounts is expected to grow significantly, with the GMV projected to reach around 100 billion yuan in 2023 [4][9][10]. Financial Technology and Enterprise Services - Financial technology and enterprise services generated revenue of 52.3 billion yuan, up 7% year-over-year. The growth in wealth management services was strong, while payment services faced slow growth due to reduced offline spending. Enterprise services saw a significant increase in gross margin, driven by higher profit margin revenue sources and improved operational efficiency [10]. Future Outlook - The report anticipates that the gaming business will stabilize and see revenue growth rebound with the launch of new games. The advertising and financial technology sectors are expected to maintain healthy growth, with overall gross margins reaching new highs. The company plans to continue enhancing shareholder returns through stock buybacks and dividends, which are expected to support the stock price [11][12]. Financial Projections - Revenue projections for FY2024-2026 are 666.6 billion yuan, 724.7 billion yuan, and 779.0 billion yuan, respectively, with year-over-year growth rates of 9.5%, 8.7%, and 7.5%. Non-IFRS net profit is projected to be 208.0 billion yuan, 244.3 billion yuan, and 269.7 billion yuan, reflecting growth rates of 31.9%, 17.5%, and 10.4% [12].

Investment Rating - The report maintains a "Strong Buy" rating for Tencent Holdings, indicating an expected return exceeding 15% relative to market benchmarks [8][19]. Core Insights - Tencent's revenue for Q1 2024 reached 159.5 billion yuan, reflecting a year-on-year growth of 6%, with a significant increase in Non-IFRS net profit by 54% to 50.27 billion yuan [20][21]. - The company is experiencing a recovery in its advertising business, driven by increased user engagement across platforms like WeChat and video accounts, contributing to a 26% year-on-year growth in advertising revenue [19][21]. - The report highlights Tencent's strong performance in AI and cloud services, with ongoing investments in AI capabilities and infrastructure, which are expected to support future growth [2][21]. Financial Performance Summary - Revenue from financial technology and enterprise services was 52.3 billion yuan, up 7% year-on-year, with strong growth in wealth management services [1]. - The company's gross margin improved to 52.6%, up 7.1 percentage points year-on-year, driven by increased revenue from video and advertising services [21]. - Forecasted net profits for 2024-2026 are projected at 171.6 billion yuan, 188.9 billion yuan, and 209.7 billion yuan, respectively, with corresponding PE ratios of 19X, 17X, and 16X [2][34]. User Engagement and Growth Metrics - User engagement metrics show over 80% growth in usage time for video services, with a 30% increase in revenue from mini-games [2][24]. - Monthly active users for WeChat and WeChat combined reached 1.359 billion, marking a 3% increase year-on-year [24]. Revenue Breakdown - The report indicates a decline in value-added services revenue to 78.63 billion yuan, down 0.9% year-on-year, primarily due to a decrease in domestic game revenue [19]. - Advertising revenue reached 26.5 billion yuan, up 26% year-on-year, attributed to the recovery in domestic consumption and increased advertising spending [19].

Investment Rating - The report assigns an "Accumulate" rating to the company [2]. Core Insights - The launch of the Tencent Yuanbao app marks Tencent's entry into the consumer AI assistant market, leveraging its content ecosystem advantages [10][15]. - The upgraded mixed Yuan model enhances the app's capabilities, supporting various input formats and providing high-quality AI search experiences [11][31]. - The report maintains the profit forecast for 2024-2025, projecting a non-IFRS net profit of 196.2 billion and 221.9 billion RMB for those years, respectively [11]. Financial Summary - Revenue for 2023 is projected at 609.015 billion RMB, with a growth rate of 9.8% compared to 2022 [4]. - Gross profit is expected to reach 293.109 billion RMB in 2023, with a significant increase in net profit to 157.688 billion RMB, reflecting a growth of 36.4% [4]. - The company's PE ratio is projected to decrease from 26.6 in 2023 to 15.7 in 2024, indicating a favorable valuation trend [4]. Product Development - The Tencent Yuanbao app features advanced AI capabilities, including AI search, document summarization, and personalized assistant creation [15][31]. - The mixed Yuan model supports a context window of 256k, allowing it to process extensive text inputs effectively [11][16]. - The app integrates with Tencent's ecosystem, enhancing its content recommendation capabilities, which is a competitive advantage over similar products [11][33]. Market Outlook - The report anticipates a 21.6% upside potential for the stock price, with a target price set at 459 HKD, corresponding to a PE ratio of 20x for 2024 [11].

传媒 2024 年 06 月 01 日 腾讯控股（00700.HK）再认知系列深度报告 I 投资主题 公司研究 证监会审核华创证券投资咨询业务资格批文号：证监许可（2009）1210 号 证监会审核华创证券投资咨询业务资格批文号：证监许可（2009）1210 号 2 报告亮点 2） 对射击游戏演化历史的复盘；从玩法与移动端适配度的层面看好"地铁 逃生"模式对《和平精英》的拉动。 总的来说，对于腾讯游戏，我们认为 Supercell 驱动将海外游戏业务重拾 增速、国内最困难的时候已经过去。具体而言： 《和平精英》将于暑期上线成熟的"塔科夫 like"玩法地铁逃生。该模式曾 经在海外版本《PUBGM》流水企稳中贡献过正面价值。我们看好这个强调收 集的乐趣、适配移动端的玩法模式进一步丰富《和平精英》游戏内容，强 化体验，提供新的付费点，进而对流水起到拉动作用。 由于《DNFM》、《荒野乱斗》的超预期表现，我们上调公司 24-26 年收入预 期 至 6741/7377/7962 亿 元 （ 原 预 测 为 6740/7331/7854 亿 元 ）， YOY+11%/9%/8%； NON-IFRS 口径下归母净利润预期 ...

Investment Rating - The report maintains a "Buy" rating for Tencent Holdings, with a target price of HKD 464.88 based on a 20x PE for the 2024 NON-IFRS net profit [24]. Core Insights - The report highlights that Supercell's performance, particularly with "Brawl Stars," has been underestimated, and it is expected to drive a sequential acceleration in game revenue [10][24]. - The anticipated launch of "Squad Busters" is expected to perform well based on its initial success in test markets [59]. - The report suggests that Tencent's strong user base from games like "Honor of Kings" and "Peacekeeper Elite" has positively influenced Supercell's operational adjustments [48]. Summary by Sections Revenue and Profit Forecast - The report projects total revenue for Tencent to reach CNY 674.1 billion in 2024, with a year-over-year growth of 10.7% [23]. - The expected net profit attributable to the parent company is forecasted to be CNY 160.9 billion in 2024, reflecting a significant recovery from a decline in 2023 [23][24]. Game Performance - "Brawl Stars" entered the global top 10 revenue rankings in April 2024, indicating a strong market position and potential for further growth [10][28]. - The report notes that Supercell's revenue is expected to grow significantly, driven by the performance of "Brawl Stars" and other titles, with international market revenue projected to reach CNY 627 billion by 2026 [74]. Operational Changes - The report emphasizes that Supercell's operational capacity has improved due to team expansion, which has allowed for better management of existing products [35][48]. - The introduction of new gameplay mechanics in "Brawl Stars" has led to a resurgence in user engagement and retention metrics [34][48]. Market Trends - The report discusses the evolution of shooting games and highlights the potential of the "Metro Royale" gameplay to enhance user experience in "Peacekeeper Elite" [63][67]. - It also notes the increasing popularity of mobile gaming and the opportunities for Tencent to leverage its existing user base to drive growth in Supercell's titles [48][67].