Tencent 0700 04 (Oct 21 - Dec 25)

[winston]

vested

Tencent launches its AI model – Hunyuan

We participated in the Tencent Cloud annual conference in Shenzhen on 7-8 Sep.

Tencent formally launched its Hunyuan AI model and started to test its WeChat miniprogramme, AI Assistant.

We believe Tencent has huge opportunities to grow its AI business, leveraging its
strong cloud platform and technology.

Reiterate Add with an unchanged DCF-based TP of HK$463.

Source: CIMB

https://rfs.cgs-cimb.com/api/download?f ... 42027FDB91

[winston]

not vested

Tencent Holdings has secured the rights to develop and publish the mobile edition of Bandai Namco Holdings’ Blue Protocol, betting on one of this year’s most anticipated multiplayer games to rekindle international growth, according to people familiar with the matter.

The world’s biggest games company has assembled a developer team for the project and holds the global distribution rights, the sources said, asking not to be identified discussing private plans.

It’s not clear when Tencent will debut Blue Protocol’s mobile game, which could take a year or more for development.

The PC edition of the game launched in Japan in June.

Blue Protocol is the latest large-budget online role-playing game that’s free to play and relies on in-game purchases for monetisation.

That’s proven a lucrative business model for established titles such as League of Legends, from Tencent-owned Riot Games.

In its first week, the game attracted 600,000 players – including 200,000 simultaneous connections at its peak – marking the fastest launch for any Bandai Namco domestic PC online game.

Source: Phillips

[winston]

vested

BofAS Cites TENCENT: Game & Advertising Biz Poised for Decent Near-term Recovery Trend

BofA Securities released a report on its visit to TENCENT (00700.HK) office during its internet tour in Shenzhen and Guangzhou.

The broker cited TENCENT management as confident of recent performance, with the commercialisation of local games progressing better in 3Q23 than in 2Q23.

The iOS game "MapleStory: The Legends of Maple", which was launched in August, ranked 6th in the market in terms of game grossing.

"Hyper Legend", a self-developed game to be launched on 21 September, recorded over 10 million pre-registrations.

"Need for Speed Mobile" is awaiting final approval.

International games continue to grow faster than local games.

BofAS expected TENCENT's advertising business will see healthy growth in 2H23, with e-commerce ads becoming more attractive as the company improves its ad performance, builds up its merchant brand database, and opens video account advertisement inventory.

TENCENT and BABA-SW (09988.HK) also stepped up their advertising cooperation.

The broker maintained its view that the advertising business will benefit from increased competition on e-commerce platforms as merchants seek to boost traffic, and TENCENT is a key beneficiary of this trend.

BofAS maintained a Buy rating on the company, with a target price of $450.

Source: AAStocks Financial News

http://www.aastocks.com/en/stocks/news/ ... -news/AAFN

[winston]

vested

Tencent’s record buybacks are not enough to end US$43 billion rout

Returned about US$24 billion via buybacks and dividends this year. But even that will not convince investors that it is due for a turnaround following a US$42 billion market value wipeout.

Fallen more than 27 per cent since its January high.

Spent US$4 billion in buybacks and another US$20 billion across cash dividends and distributed shares in food-delivery firm Meituan.

Tencent’s fintech and business services segment, which accounts for about one-third of total revenue, likely grew at a slower pace last quarter as offline payment volumes were hit by slower retail sales.

The bank also trimmed its 2023 games revenue growth forecast given contribution from new launches may take longer to ramp up.

Tencent shifts its business mix towards higher-margin segments such as mini-games and video accounts while reducing exposure to its less profitable video-streaming business.

Source: Bloomberg

https://www.businesstimes.com.sg/compan ... llion-rout

[winston]

vested

Tencent logs robust revenue growth as games, advertising sales shine

by Josh Ye

Third-quarter revenue climbed 10%, as its games business staged a robust recovery from a regulatory crackdown on the country's tech sector and online advertising sales surged.

Sales came in at 154.6 billion yuan ($21.4 billion) - in line with market forecasts

Tencent's domestic games revenue for the quarter grew 5%, driven by titles such as the multiplayer role-playing game "Lost Ark" and shooting game "Valorant".

Online advertising business reported a 20% jump in revenue.

Its fintech business, its second-largest business unit, reported a 16% climb in sales.

Net profit declined 9% to 36.1 billion yuan from a year ago when the company had a strong quarter after divesting stakes in portfolio companies such as Sea.

Source: Reuters

https://finance.yahoo.com/news/1-tencen ... 03040.html

[winston]

vested

Tencent reports better-than-expected third-quarter profit, revenues up on ‘high quality’ growth in ads, games

Tencent’s advertising business posted the fastest growth among its segments, with a 20 per cent increase to 25.7 billion yuan in the quarter

International games revenue rose by 14 per cent year on year to 13.3 billion yuan, down from 19 per cent growth in the previous quarter

by Iris Deng and Ann Cao

Source: SCMP

https://www.scmp.com/tech/big-tech/arti ... tinue-grow

[winston]

vested

Tencent Holdings (700 HK) - 3Q23 inline revenue but strong profit beat

Tencent posted a better-than-expected 3Q23 results with an in-line revenue growth but a beat in adjusted earnings, largely driven by margin expansion.

Total revenue was largely in-line with market expectations and rose 10% year-on-year (YoY).

Gross profit rose 23% YoY, 5% higher than market expectations, driving a +5.2ppt YoY increase in gross profit margin (GPM) to 49.5% which was a record high since 1Q20.

Adjusted net profit beat market expectations and surged 39% YoY or 20% quarter-on-quarter (QoQ), driven by higher GPM and better cost control.

Adjusted EPS came in 12% higher than consensus forecast at in at CNY4.66.

Total deferred revenue increased 4% YoY to CNY92.2b (vs +3% YoY in 2Q23).

While it is expected that adjusted net profit would beat expectations given its proven track record in strong cost discipline, the beat by a magnitude of about CNY5b was a positive surprise.

Having said that, we expect a neutral share price reaction post 3Q23 results in the near-term as market concern about the moderation of 3Q23 ad revenue to low-20%.

4Q23 revenue will face a high base effect in ads and international games from last year, and sequential moderation in new domestic games in 4Q23.

Having said that, in the medium-term, we believe ongoing disciplined cost control and optimising operation efficiency, coupled with emerging higher-margins revenues stream such as video account, in-feed ads and e-commerce tech fee and mini games etc., should help sustain higher quality growth in the next few quarters.

We believe Tencent will offer earnings visibility on the back of structural margin uplift with defensive earnings mix amid challenging macro environments.

However, we believe patience will be required for the outperformance of the stock due to technical overhangs from major shareholders selling down the stake.

The stock is trading at 16x forward price-to-equity (P/E) with an expectation of 17% adjusted 2024 earnings growth.

We maintain our fair value estimate of HKD460.00 based on sum of the parts (SOTP) methodology. BUY.

Source: OCBC

[winston]

M Stanley's Top Pick Switches from Alibaba to TENCENT; Latter's Rating Restated at Overweight


2023/11/17

Morgan Stanley remarked in a report that it expected TENCENT (00700.HK)'s natural growth in margins to be sustainable, with steady growth in its video account advertising business and potential to boost shareholder returns.

The broker maintained its Overweight rating and target price of $430 on TENCENT, reflecting 15x core P/E ratio for next year.

TENCENT also replaced Alibaba (BABA.US) as the broker's top pick.

Related News - CICC: Livestreaming Ecommerce Growth on 11.11 Outruns Notably; Kuaishou Order Vol. Up ~50%

The broker believed TENCENT has historically commanded a valuation premium among China's Internet leaders because of strong revenue growth and earnings transparency.

The recent acceleration of share buybacks has also supported the stock's performance.

Positive factors driving earnings growth include the globalisation of its gaming business, the monetisation of social network advertising, the expansion of its fintech offerings, and strategic upgrades in the consumer and industrial internet.

Source: AAStocks Financial News

http://www.aastocks.com/en/stocks/news/ ... -news/AAFN

[winston]

vested

TENCENT, NTES-S Collapse 14%, 20%+; CN Issues Draft on Online Game Admin.

Mainland China released draft on online game administration, which prohibits incentive rewards on daily log-in and first-time recharge.

On the news, TENCENT (00700.HK), NTES-S (09999.HK) and BILIBILI-W (09626.HK) tracked deeper plunges after midday.

Source: AAStocks Financial News

http://www.aastocks.com/en/stocks/analy ... stock-news

[winston]

vested

Tencent Games: CN Govt Draft on New Online Game Rules Does Not Fundamentally Change Key Elements of Game Biz Model

China's National Press and Publication Administration (NPPA) is pooling comments on draft regulations for online games, which include measures to protect minors.

Zhang Wei, vice president of Tencent Games, a subsidiary of TENCENT (00700.HK), responded that Tencent has been strictly implementing the management requirements since the release of the new regulations on the protection of minors in 2021 and that the game hours and consumption data of underage users are now at the lowest level on record.

He pointed out that the draft of the new regulations does not fundamentally change the key elements of the game's business model and operation rhythm of Tencent.

He believed that the release of the draft of the new regulations by the authorities to fully solicit opinions from the industry and the society, will be more conducive to the orderly and healthy development of the game industry

He emphasized that Tencent Games will continue to adhere to the high-quality product strategy of technological innovation and cultural leadership and will implement the high-quality development of the game industry of China, under the support of the competent authorities.

Source: AAStocks Financial News

http://www.aastocks.com/en/stocks/news/ ... -news/AAFN