According to the Zhito Finance APP, GF Sec published a research report stating that it maintains a "buy" rating on tencent (00700), expecting the company's revenue to reach 657.9 and 713 billion yuan in 2024-2025, a year-on-year increase of 8.0%/8.4%. The adjusted net income attributable to the parent is expected to be 221.8 and 244.4 billion yuan, an increase of 45.0% and 10.2%. Based on the revenue and performance in 2024, the reasonable value estimated by SOTP is 485.21 HKD per share. The company's advertising performance is robust, with significant commercialization potential for WeChat, and there may be an increased focus on WeChat e-commerce in the future, which will help continuously enhance advertising performance. The growth trend for overseas games is good, and domestic games continue to solidify evergreen products.

GF Securities' main points are as follows:

The company released its performance for Q3 2024:

Q3 2024 revenue reached 167.2 billion yuan, YoY/QoQ up 8%/+4%, compared to the consensus expectation of 167.9 billion yuan from institutions. Q3 2024 Non-GAAP net income attributable to the parent was 59.8 billion yuan, YoY/QoQ up 33%/+4%, against the consensus expectation of 54.4 billion yuan.

In Q3 2024, the performance of games and advertising was steady, while the financial business was dragged down by weak consumer demand, and mini-programs continued to expand trading scenarios.

(1) In Q3 2024, game revenue reached 51.8 billion yuan, YoY/QoQ up 13%/+7%. Domestic game revenue increased by 14%, driven by "Valorant," "Honor of Kings," "Peacekeeper Elite," and "Dungeon & Fighter: Origin." Overseas game revenue rose by 9%, with "PUBG Mobile" and "Brawl Stars" performing strongly.

(2) In the third quarter of 2024, the revenue from social networks was 30.9 billion yuan, with a year-on-year and quarter-on-quarter increase of 4% and 2%, respectively.

(3) In the third quarter of 2024, the revenue from online advertising was 30 billion yuan, with a year-on-year and quarter-on-quarter increase of 17% and 0%, respectively. The demand from advertisers for Video Accounts, Mini Programs, and Search has increased, along with a slight contribution from brands related to the Olympics. The increase in advertising expenditure in the gaming and e-commerce industries offset the weakness in the real estate and csi sws food & beverage index industries.

(4) Revenue from financial and enterprise services was 53.1 billion yuan, with a year-on-year increase of 2% and a quarter-on-quarter increase of 5%. Financial service revenue remained flat year-on-year, while enterprise service revenue grew driven by merchant technology service fees. The GMV of Mini Programs exceeded 2 trillion yuan in the third quarter of 2024, increasing by over ten percentage points, benefiting from the coverage of diverse consumer scenarios.

Risk warning: Increasing regulatory scrutiny, stricter approval of game licenses, and risks from competition with short videos.