TENCENT(00700) 西南证券·2024-05-21 05:02Investment Rating - The report maintains a "Buy" rating for Tencent Holdings with a target price of 491.40 HKD, based on a 20x PE for 2024 [2][4][17]. Core Insights - Tencent's revenue for Q1 2024 reached 159.5 billion RMB, a year-on-year increase of 6%, while Non-IFRS net profit surged to 50.3 billion RMB, reflecting a 54% growth [2][4]. - The company continues to optimize its revenue structure, with high-margin businesses driving profitability [2][4]. - The active user base of WeChat and Weixin reached 1.359 billion, marking a 3% year-on-year increase, indicating sustained engagement within its ecosystem [4]. Revenue and Profit Summary - Q1 2024 revenue was 1595 billion RMB, up 6% year-on-year, and Non-IFRS net profit was 503 billion RMB, up 54% year-on-year [2][4]. - The revenue from value-added services was 786 billion RMB, a slight decline of 1% year-on-year, while gaming revenue in the domestic market was 345 billion RMB, down 2% [3]. - Advertising revenue grew by 26% year-on-year to 265 billion RMB, driven by strong performance in WeChat's advertising platforms [3][4]. Business Segment Performance - Value-added services, including gaming and social networking, remain the primary revenue source, with expected growth rates of 5.5% to 6.0% from 2024 to 2026 [11][12]. - Financial technology and enterprise services are projected to grow at rates of 10.0% to 9.0% during the same period, supported by strong demand for wealth management and cloud services [11][12]. - The advertising business is anticipated to maintain robust growth, with expected order volume increases of 20.0% to 18.0% from 2024 to 2026 [11][12]. Financial Forecast - The forecast for Non-IFRS net profit is 214.26 billion RMB for 2024, 238.27 billion RMB for 2025, and 262.11 billion RMB for 2026, with corresponding EPS of 22.75 RMB, 25.30 RMB, and 27.83 RMB respectively [4][17]. - The report highlights a continuous focus on core business areas, with improvements in revenue structure and operational efficiency expected to drive future growth [4][17].