TENCENT(00700) 长城证券·2024-05-17 08:32Investment Rating - The report maintains a "Buy" rating for Tencent Holdings, expecting the stock price to outperform the industry index by over 15% in the next six months [3][24]. Core Insights - Tencent Holdings reported a significant increase in profitability, with Q1 2024 net profit reaching 41.9 billion HKD, a year-on-year growth of 62%, exceeding market expectations [3][4]. - The company's revenue for Q1 2024 was 159.5 billion HKD, a 6% year-on-year increase, aligning with market expectations [3][4]. - The report highlights the continuous improvement in gross margin, which reached 52.6% in Q1 2024, driven by an increase in high-margin business revenue [4][9]. Financial Performance Summary - Revenue: - 2022A: 554,552 million HKD - 2023A: 609,015 million HKD - 2024E: 669,368 million HKD - Growth rate (2023A): 9.8% [3][12] - Net Profit: - 2022A: 188,243 million HKD - 2023A: 115,216 million HKD - 2024E: 173,678 million HKD - Growth rate (2023A): -38.8% [3][12] - EPS: - 2022A: 19.98 HKD - 2023A: 12.23 HKD - 2024E: 18.44 HKD [3][12] - P/E Ratio: - 2022A: 17.6 - 2023A: 28.7 - 2024E: 19.1 [3][12] Business Segment Performance - Gaming: - Q1 2024 gaming revenue was 48.1 billion HKD, with domestic gaming revenue at 34.5 billion HKD, showing a slight decline of 2% year-on-year due to revenue deferral [5]. - Online Advertising: - Q1 2024 online advertising revenue grew by 26% year-on-year to 26.5 billion HKD, driven by the strong performance of video ads [7][9]. - Financial Technology and Enterprise Services: - Revenue increased by 7% year-on-year to 52.3 billion HKD, benefiting from the video account ecosystem [7][9]. Future Outlook - The report projects revenue growth for Tencent Holdings, estimating revenues of 669.4 billion HKD in 2024, 729.3 billion HKD in 2025, and 788.9 billion HKD in 2026 [9]. - Expected net profits are projected at 173.7 billion HKD for 2024, 194.9 billion HKD for 2025, and 214.1 billion HKD for 2026 [9]. - The report emphasizes the potential for continued growth in high-margin businesses such as mini-program games and video account advertising [9].