TENCENT(00700) 广发证券·2024-11-19 12:35Investment Rating - The report maintains a "Buy" rating for Tencent Holdings [5][24]. Core Insights - Tencent's Q3 2024 revenue reached 167.2 billion RMB, with a year-over-year (YoY) growth of 8% and a quarter-over-quarter (QoQ) growth of 4%, slightly below Bloomberg consensus expectations of 167.9 billion RMB. The Non-GAAP net profit attributable to shareholders was 59.8 billion RMB, reflecting a YoY increase of 33% and a QoQ increase of 4%, surpassing consensus expectations of 54.4 billion RMB [1][2]. Summary by Relevant Sections Financial Performance - Q3 2024 gaming revenue was 51.8 billion RMB, showing a YoY increase of 13% and a QoQ increase of 7%. Domestic game revenue grew by 14%, driven by titles such as "Valorant," "Honor of Kings," "Peacekeeper Elite," and "Dungeon & Fighter: Origin." International game revenue increased by 9%, with strong performances from "PUBG Mobile" and "Brawl Stars" [2][12]. - Social network revenue for Q3 2024 was 30.9 billion RMB, with a YoY increase of 4% and a QoQ increase of 2% [2]. - Online advertising revenue reached 30 billion RMB, reflecting a YoY increase of 17% and a QoQ increase of 0%. Demand from advertisers in video accounts, mini-programs, and search services contributed to this growth [2][13]. - Financial and enterprise services revenue was 53.1 billion RMB, with a YoY increase of 2% and a QoQ increase of 5%. Financial services revenue remained stable YoY, while enterprise services revenue grew due to merchant technology service fees [2][12]. Earnings Forecast and Valuation - The report forecasts Tencent's revenue for 2024 and 2025 to be 657.9 billion RMB and 713.0 billion RMB, respectively, with YoY growth rates of 8.0% and 8.4%. Adjusted net profit is expected to be 221.8 billion RMB and 244.4 billion RMB, reflecting growth rates of 45.0% and 10.2% [3][24]. - The estimated fair value based on the Sum-of-the-Parts (SOTP) valuation method is 485.21 HKD per share [5][24]. Business Segments Valuation - The core business valuation is estimated at 4.08 trillion HKD, with gaming business valued at 1.77 trillion HKD, marketing services at 973.9 billion HKD, and financial and enterprise services at 1.23 trillion HKD [24][23].