Jinwu Financial News | According to Huacheng Securities Research Report, Tencent Holdings (00700) 3Q24 achieved revenue of 167.2 billion yuan, YOY +8% and QOQ +4%, in line with expectations; achieved gross profit of 88.8 billion yuan, YOY +16%, and QOQ +3%, in line with expectations; achieved net profit of 59.8 billion yuan, YOY +33%, QOQ +4%, exceeding expectations by about 10%.
The bank said that core products are growing steadily, and that turnover is gradually being released as revenue. 1) The game business in the international market achieved revenue of 14.5 billion yuan, YOY +9%, which is slightly lower than market expectations. “PUBGM” and “Brawl in the Wild” still achieved good performance this quarter. The release of “VALORANT” drove sales YOY of +30%; the revenue growth rate was still significantly higher than the revenue growth rate, but the retention rate of some games increased, causing the revenue deferral cycle to extend accordingly. The bank expects revenue to be gradually released in the next quarter; 2) The game business in the local market achieved revenue of 37.3 billion yuan, YOY +14%, slightly exceeding market expectations. It is expected to be mainly driven by confirmation of DNFM's turnover and steady upward performance of leading products. 3) Recently, PR has started for a number of products. The pipeline stocks various products such as “One Piece: Aim and Ambition”, “King's Glory World”, and “Under Stranger People”, and “Under Stranger Things”, which are combined with the revenue released in the early stages, and I am optimistic about the determinism of the growth rate for the next 2 quarters.
The bank adjusted the company's 24-26 revenue forecast to 658.6/717.9/771.3 billion yuan (the original forecast was 661.1/718.9/773.3 billion yuan), YOY +8%/9%/7%; adjusted the NON-IFRS net profit forecast to 222.3/251/276.1 billion yuan (the original forecast was 218.6/244/271.1 billion yuan), YOY +41%/13%/10%. “Following the adjustment of the NON-IFRSEPS forecast to 24.24/28.09/31.69 (the original forecast was 23.82/27.28/31.08 yuan), YOY +45%/16%/13%. The target valuation level for 25-year NoniFrseps18xPE corresponds to a target price of HK$546.60, maintaining a “recommended” rating.
