TENCENT(00700) 国信证券·2024-06-24 02:01Investment 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]