Bocom Intl has released a research report stating that it maintains a 'buy' rating on Tencent (00700), with expectations of accelerated growth in mobile game revenue in the second quarter (+9%). Considering the stable flow performance of 'MDNF', there may still be room for upward adjustment of mobile game water flow and revenue for the whole year. NetEase-S (09999) is also rated as a 'buy', with an expected 15% growth in mobile game revenue in the second quarter. With the scheduling of several new games in the second half of the year, plus the return of 'Warcraft', it is expected to alleviate the drag on game revenue growth from the high base of 'Nishuishan Mobile Games' and the adjustment of 'Dream Fantasy' end games.
The bank stated that the local mobile game water in June 2024 increased by 22% year-on-year, accelerating compared to May and June. In the second quarter of 2024, Tencent's local water flow increased by 28% year-on-year, reaching RMB 6.7 billion, driven by the new game 'MDNF'. Overseas water flow increased by RMB 2.7 billion/47% year-on-year, mainly contributed by 'Wildness fighting' and new game 'Explode Team'. NetEase: Local water flow increased by +25%/RMB 1.7 billion year-on-year, 'Nishuishan'/'Fifth person grid' contributed RMB 1.6/0.7 billion respectively, partially offset by the high base of 'Egg Party'. Overseas water flow decreased by 6%/RMB 50 million year-on-year. Regarding new games: Tencent's 'MDNF' and Bilibili's 'Three Strategies' performed exceptionally, and as of July 3, they remained in the top 2/5 of the iOS game sales chart. Daily water flow exceeds RMB 0.1 billion/RMB 25 million.