TENCENT(00700) 长江证券·2024-11-19 11:55Investment Rating - The investment rating for Tencent Holdings (0700.HK) is "Buy" and is maintained [5]. Core Insights - Tencent reported Q3 2024 revenue of 167.2 billion, representing an 8% year-on-year increase and a 4% quarter-on-quarter increase. Operating profit reached 53.3 billion, up 20% year-on-year and 5% quarter-on-quarter. Non-IFRS net profit attributable to shareholders was 59.8 billion, reflecting a 33% year-on-year increase and a 4% quarter-on-quarter increase [2][6]. Summary by Sections Revenue Performance - The revenue growth was driven by stable performance from evergreen games and the addition of new games, leading to accelerated revenue growth in both domestic and overseas markets. Domestic game revenue grew 14% year-on-year to 37.3 billion, while overseas game revenue increased 9% year-on-year to 14.5 billion [7]. Advertising and AI Impact - Advertising revenue showed strong growth, with marketing services revenue increasing 16.6% year-on-year to 30 billion, supported by AI enhancements and the upcoming Paris Olympics boosting brand advertising [7]. Profitability and Margins - Tencent's gross margin remained high at 53.1%, with notable increases in gross margins across various segments. However, marketing service margins saw a slight decline due to rising content costs [8]. Future Outlook - The value of the WeChat ecosystem continues to manifest, with expectations for sustained high profit margins. The ongoing advancements in AI are anticipated to inject continuous growth momentum into the company [9].