Lyon released a report stating that Tencent (00700.HK) has shown resilience when facing macro challenges, expecting total revenue and adjusted EBIT for the third quarter to grow by 9% and 18% year-on-year, to 168 billion and 61 billion yuan, mainly driven by strong gaming performance and advertising growth.

The bank believes that Tencent's online game revenue is estimated to increase by 12% year-on-year in the third quarter due to the outstanding performance of Dungeon & Fighter mobile game and Wilderness Survival. Advertising revenue is expected to rise by 16% due to improvements in advertising technology and increased advertising placements on video platforms. With the accumulation of deferred revenue and a stable gaming product pipeline, the bank expects Tencent's gaming revenue growth to further accelerate.

The bank has raised Tencent's adjusted net profit forecast for the next two years by 3% each, raising the target price from 480 yuan to 500 yuan, maintaining an 'outperform the market' rating.