Tencent 0700 04 (Oct 21 - Dec 25)

[winston]

vested

Tencent Holdings (700 HK)
4Q22 earnings missed due to R&D costs, online ads and games recovered faster than expected

Revenue increased by 0.5% to Rmb145bn, with online game decreasing by 2%

Non-IFRS net profit increased by 19% to Rmb30bn, below consensus of 24% increase, due to higher R&D related costs on overseas business

Online ads and International game revenue picking up faster than expected in 4Q22; expect Fintech growth to turn positive in 1Q23

Source: DBS

https://www.dbs.com/insightsdirect/comp ... subsource=

[winston]

vested

Tencent Holdings (700 HK)
4Q22: Ample Monetisation Opportunities From Video Accounts And Development Of AI Capabilities

Tencent’s 4Q22 results are largely in line with our expectations.

Revenue was flattish yoy at Rmb145b, in line with our and consensus estimates.

Gross margin expanded 2.6ppt yoy, reported at 42.6%, in line with consensus expectation.

Non-GAAP operating profit was Rmb39.4b, growing 19% yoy, and non-GAAP OPM came in at 27.2%, better than our estimate.

Non-IFRS net profit increased by 19.4% yoy to Rmb29.7b, 2.2% and 3.7% below our and consensus estimates respectively, given optimised resource allocation.

Maintain BUY. Target price: HK$435.00.

Source: UOBKH

https://research.uobkayhian.com/content ... c49b079170

[winston]

vested

Brokers│Views

Citigroup│On track to deliver stronger sustainable growth and shareholder returns

Nomura│Quarterly revenue in line with estimate-missing earnings

CLSA│Growth resumed

BofA Securities│Multiple growth engines to propel growth and expand profit margins

Haitong International│Businesses expected to regain acceleration momentum this year

CICC│Significant growth recorded; crucial to capitalize on recovery momentum

Credit Suisse│Quarterly results in line; full-fledged development expected across all business segments this year

UBS│Revenue and earnings recovery driven by product monetization

Jefferies│Rating reiterated at Buy based on multiple upcoming business growth drivers

Macquarie│Poised to hail growth

Morgan Stanley│Outlook positive across all business segments

Goldman Sachs│Quarterly results beat with strengthened visibility on earnings acceleration

HSBC Global Research│Recovery in game and advertising segments further confirmed

CCB International│Selected as sector top pick based on its solid performance

Source: AAStocks Financial News

http://www.aastocks.com/en/stocks/news/ ... t-news/HK6

[winston]

vested

TENCENT HOLDINGS (700 HK)

Recommendation : BUY
Fair Value : HKD 480.00

RECOVERY ON TRACK, SIGNS OF GOOD TRACTION IN ADVERTISING AND GAMING BUSINESSES .

4Q22 results in-line, with trends improving during the quarter at the margin

Advertising business continues to be a strong growth driver

Domestic gaming recovering gradually, management optimistic on international gaming business

Economic recovery on track; management sees generative AI as a business opportunity; Maintain FV at HKD480.

Over the long-term, we expect advertising and financial services business to be the growth engines for Tencent while the domestic gaming business matures.

Tencent continues to be a good allocator of capital, returning close to USD40b of capital to shareholders via the JD shares distribution, Meituan shares distribution and share buybacks in an extremely challenging macro environment in the past 12 months.

Management has shared that trends across its businesses have been improving in 1Q23, and we continue to be positive about the longer-term outlook.

Over the longer term, management believes generative AI will be a growth multiplier for their business, but will take their time to roll out products and services on a measured pace.

Following slight adjustments, we maintain our fair value (FV) at HKD480.

Source: OCBC

[winston]

not vested

Tencent In the right mode to pursue growth

Tencent’s total revenue reached Rmb554.6bn in FY22, down 1% yoy and up 0.5% yoy in 4Q22, slightly below our expectation.

Non-IFRS net profit was Rmb115.6bn in FY22, down 7% yoy, and up 19% yoy in 4Q22, largely in line with our expectation and consensus.

GPM improved in 4Q22, better than our expectation, driven by streamlining underperforming businesses and paying more attention to higher ROI investments.

We expect revenue to grow 11.6% yoy and non-IFRS NP to increase by 23.5% yoy in FY23F, driven by a low base in FY22 and a faster recovery in games and ads.

Reiterate Add with a new DCF-based TP of HK$441.

Source: CIMB

https://rfs.cgs-cimb.com/api/download?f ... 456BC79A2F

[winston]

vested

Tencent(700)

Analysis:-

Tencent (700.HK) recently announced its results for the fourth quarter of 2022.

The company`s revenue amounted to RMB 144,954 million, representing an increase of 0.5% YoY.

Cost of revenue amounted to RMB 83,132 million, representing a decrease of 3.8% YoY.

Gross profit amounted to RMB 61,822 million, representing an increase of 6.9% Yo! Y.

Non-GAAP profit attributable to shareholders amounted to RMB 29,711 million, representing an increase of 19.4% YoY.

With the re-approval of game licenses in the mainland and the recovery after the epidemic in the mainland, Tencent`s non-GAAP profit attributable to shareholders has increased YoY for two consecutive quarters, up 1.6% and 19.4% respectively, reflecting the company`s return to growth momentum.

In the fourth quarter, the company`s international market game revenue increased by 5% to RMB 13.9 billion.

After excluding the impact of exchange rates and adjustments related to Supercell in the fourth quarter of 2021, the increase was 11%, reflecting the company`s good development momentum in overseas markets.

Strategy：
Buy price: $ 376.8 Target price: $407 Stop-loss price: $356.8

Source: Daily Wealth

[winston]

Tencent brings paid subscription to WeChat Channels in race against short video giants ByteDance, Kuaishou

The paid subscriptions service will allow content creators to earn more money by charging users to view some videos, Tencent said

WeChat will also let content creators open the comment section of their accounts to display advertisements, in exchange for a cut of the ad revenue

by Iris Deng

Source: SCMP

https://www.scmp.com/tech/big-tech/arti ... e-kuaishou

[winston]

vested

Tencent’s sales grow most in over a year after China reopening

By Zheping Huang

Revenue rose a faster-than-anticipated 11% to almost 150 billion yuan (RM98.17 billion) for the three months ended March, exceeding the 146.29 billion yuan average forecast. But net income of 25.8 billion yuan fell short of projections.

Grew online advertising 17%.

International gaming sales for the first quarter grew an accelerated 25%, versus a 6% gain at the domestic division, which had contracted over the past year.

Source: Bloomberg

https://theedgemalaysia.com/node/667393

[winston]

vested

Domestic appetite drives Tencent profit up by 10pc

Tencent (0700) saw its net profit for the first quarter jump by 10 percent to 25.8 billion yuan (HK$28.9 billion), driven by a rebound in China's domestic consumption, although its online advertising income declined by 15 percent from the previous quarter.

Revenue rose a faster-than-expected 11 percent to almost 150 billion yuan for the three months ended March, exceeding the 146.29 billion yuan average forecast.

Witnessed a 17 percent year-on-year growth in online advertising, but experienced a 15 percent decrease quarter-on-quarter.

Tencent has yet to find its next big gaming success in China, after Honor of Kings and Peacekeeper Elite cemented its lead in the pre-Covid era.

Aims to fill its long-empty pipeline in 2023 with hits like Valorant. Such new launches will test a rapidly saturating domestic market, where younger players are increasingly drawn to up-and-comers like anime specialist Mihoyo.

Source: Bloomberg

https://www.thestandard.com.hk/section- ... up-by-10pc

[winston]

vested

Tencent Holdings (700 HK)
1Q23: Strong Online Game And Ad Recovery; Accelerating Earnings Growth

Tencent’s 1Q23 results were largely in line with our expectations.

Revenue grew 10.7% yoy to Rmb150b, 2.5% above consensus estimates.

Gross margin expanded 3.3ppt yoy to 45.5%, beating the street’s expectations.

Non-GAAP operating profit was Rmb48.4b, surging 32.4% yoy, and non-GAAP OPM came in at 32.3%, better than our estimates.

Non-IFRS net profit increased 27.4% yoy to Rmb32.5b, 2% below consensus estimates, given a positive revenue mix shift.

Maintain BUY. Target price: HK$435.00.

Source: UOBKH

https://research.uobkayhian.com/content ... 4d16e5b733