© Archyde.com. CITIC Securities: Maintain Tencent Holdings (00700) “Buy” rating target price HK$451
Zhitong Finance APP was informed that CITIC Securities released a research report stating that it maintains the “buy” rating of Tencent Holdings (00700), adjusts the 2022-24 Non-IFRS net profit forecast to 1147/1409/167.3 billion, and the target price is 451 Hong Kong dollars. Under the impact of the epidemic, the company’s revenue growth in 4Q22 is still under pressure. Looking forward to 2023, the bank believes that after the epidemic policy is optimized, as the commercialization of video accounts accelerates and new games are launched one after another, the company’s performance is expected to gradually resume growth. At the same time, cost reduction and efficiency enhancement continue to advance, and the profit side is expected to further improve.
The bank expects the company to achieve revenue of 141.9 billion yuan (YoY-1.6%, QoQ+1.3%) in 4Q22, with a gross profit margin of 44.8% (YoY+4.7pcts). In terms of expense ratio, the bank predicts that the company’s 4Q22 sales/management expense ratio will be 5.1%/18.7% (YoY-3/+1.8pcts) respectively, and predicts that the company will achieve a non-IFRS net profit of 28.8 billion yuan (YoY+15.7%) in 4Q22. In terms of segmented business, it is estimated that the 4Q22 value-added service business revenue will be 71.3 billion yuan (YoY-0.9%, QoQ-2%).
The bank mentioned that due to the deferred income of the company’s game business has a certain buffer, and the new game “Goddess of Victory: NIKKE” performed well in November, the bank expects the company’s game revenue to decline less than the market. Since September 2022, key games such as “Fearless Contract”, “Dawn Awakening: Vitality”, and “Metal Slug: Awakening” have been issued with version numbers. The bank expects that with the gradual launch of blockbuster new games, the company’s game business is expected to return. It is recommended to pay attention to the game schedule in 2023. The bank expects the company’s social network revenue to be 29.7 billion yuan in 4Q22 (YoY+2.0%). Tencent Video, China Literature, Huya, etc. are promoting cost reduction and efficiency enhancement, and social network business content investment and personnel costs are expected to continue to optimize.