This report is read as follows:
Net profit narrowed in the short term, while the game business fell slightly. Advertising business may welcome new opportunities, and economic activity is expected to promote the sustained growth of To-B.
Summary:
Maintain the overweight rating. Taking into account the macroeconomic and regulatory effects, Tencent's net profit from 2022 to 2024 was lowered to 1,314,1616,000,000 yuan (the previous value 2022-2024 is predicted to be 1550,786pm 204.9 billion yuan), corresponding to 19X/16X/14X, respectively, maintaining the overweight rating.
Event: the company's Q2 revenue in 2022 was 134.034 billion yuan, down 3% from the same period last year; the net profit returned to the mother was 18.619 billion yuan, down 56% from the same period last year; Nonmuri IFRS 'net profit was 28.139 billion yuan, down 17% from the same period last year. 2022H1 realized revenue of 269.505 billion yuan, down 1% from the same period last year; net profit from home was 42.032 billion yuan, down 53% from the same period last year; Nonmurf IFRS 'net profit from home was 53.684 billion yuan, down 20% from the same period last year.
Net profit narrowed in the short term, while the game business fell slightly. Net profit narrowed for two consecutive quarters compared with the same period last year, Q2 achieved positive growth of 10% compared with the same period last year, and results were achieved in reducing costs and increasing efficiency. Q2 local game market revenue of 31.8 billion yuan, down 1% from the same period last year, mainly because the local market experienced the impact of the transition period, "Arena of Valor"
The total usage time of adult users of "Game for Peace" and "Game for Peace" increased year-on-year, and income such as "League of Legends Mobile Games", "return to the Empire" and "Golden shovel Battle" increased again; game revenue in the international market totaled 10.7 billion yuan, down 1% from the same period last year due to the impact of the post-epidemic era. Q2 Wechat and WeChat combined monthly active user accounts of 1.299 billion, an increase of 3.8% over the same period last year. The basic social network was solid, and the number of monthly active user accounts of QQ mobile terminals was 569 million, down 3.8% from the same period last year.
Advertising business or welcome new opportunities, video number advertising is expected to bring new increments. 2022 Q2's online advertising business revenue was 18.638 billion yuan, down 18% from the same period last year, mainly due to weak demand in Internet services, education and finance. The total usage time of Wechat video account has exceeded 80% of the total users in moments. The video number information stream advertisement launched in July is expected to bring new opportunities for the advertising business. Q2 financial technology and enterprise services business achieved revenue of 42.208 billion yuan, accounting for more than 30% of the revenue for the fifth consecutive quarter, becoming an important pillar of revenue. Q2 invested 15 billion yuan in R & D, up 17% year on year. H1 total investment in R & D reached 30.4 billion yuan, an increase of 26% over the same period last year. The company has made remarkable achievements in database, big data, artificial intelligence and other areas. Future economic activities are expected to continue to promote the growth of To-B business.
Risk tips: new games, video numbers are not as expected, policy regulatory risk, user loss risk.