Jitong Financial APP learned that Morgan Stanley released a research report that maintained Tencent's "overweight" rating of 00700, with a target price of HK $480, corresponding to a core price-to-earnings ratio of about 22 times forecast 2023. Due to operating deleveraging, continuous income portfolio adjustment, etc., profit margin pressure is expected to persist in the short term. Operating profit under non-GAAP in the first quarter fell to 26.2% compared with the same period last year. In addition, the operating profit forecast for 2020-24 under non-IFRS was cut by 4%, 5% and 2%.
Due to the normalization of game growth and further delays in the recovery of the advertising business, revenue in the first quarter of this year is expected to grow 2 per cent year-on-year to 138.7 billion yuan, while profit under non-IFRS reached 36.3 billion yuan, down 15 per cent from the same period last year, the report said. it is expected that the domestic launch of new games and the commercialization of Wechat video accounts may be new catalysts.
The bank said that the company's domestic game business may decline slightly in the first quarter compared with the same period last year, and three licensed game products will be launched within the month as the game version number resumes approval. The expected growth of the international game business slowed to 11%, mainly due to the impact of one-time deferred revenue recognition. Online advertising revenue may further drop to 18%, not taking a turn for the better under the influence of the epidemic, and advertising business may not resume growth until the fourth quarter, and growth is expected to accelerate next year, driven by the commercialization of video numbers.