According to a research report from Citigroup, there were two reports yesterday (19th) regarding Tencent's gaming operations on the Android system. First, according to 36kr holdings, Tencent's new game, Dungeon and Fighter: Origins (DNF mobile game), announced that it will no longer be available on some Android platforms and players will have to re-download it from their official website starting today. Second, it was reported that Huawei will reach an agreement with Tencent to allow WeChat to operate fully on its HarmonyOS system without sharing any revenue with Huawei. The bank believes that if these two reports are true, they will have a positive impact on Tencent's gross margin of their value-added business.

The bank pointed out that mainland Android channels have traditionally charged up to 50% of the revenue from in-app purchases, while the revenue sharing percentage for iOS in mainland and global markets and Google Play in global markets is around 30%. With the emergence of other game distribution channels such as Taptap and company websites, more powerful IP games are choosing to distribute themselves, reducing their dependence on the Android system.

Citigroup has a target price of 515 yuan for Tencent and maintains a "buy" rating.