CMBI: 2H Game Market Reaccelerates; Top Pick Tencent

CMBI expects the game market to reaccelerate in 2H24 with the launch of highly anticipated games. Tencent, the sector’s top pick, is forecasted to see a 10% YoY growth in game revenues, driven by "Dungeon & Fighter: Origins" (DNF mobile game) and improved performance of its overseas games. Tencent's strong R&D and international expansion will help maintain its leading position.

CMBI is also optimistic about $NTES-S(09999.HK)$ , predicting a 10% YoY revenue growth in 2H24 due to new games like “NARAKA: BLADEPOINT” mobile and the return of Blizzard games.

Additionally, $BILIBILI-W(09626.HK)$ ’s mobile game business is expected to recover, boosted by the success of “San Guo: Mou Ding Tian Xia,” which has performed well on the iOS download and bestseller lists, potentially leading to better-than-expected revenue growth in 2H24.

The broker compiled the game revenue performance of the three companies for the past four quarters.

$TENCENT(00700.HK)$ │+5%│+7%│-2%│-1%
$NTES-S(09999.HK)$ │+4%│+16%│+10%│+7%
$BILIBILI-W(09626.HK)$ │-15%│-33%│-12%│-13%