Glonghui, January 23 丨 Barclays published a research report predicting that Tencent (00700.HK)'s overall revenue for the fourth quarter of last year will rise 24% year-on-year to 82.3 billion yuan; of these, mobile game revenue increased 5% year-on-year and fell 9% quarterly to 17.7 billion yuan; computer game revenue fell 13% year-on-year and fell 10% to 11.2 billion yuan quarterly; overall advertising revenue rose 43% to 17.7 billion yuan. Gross margin and non-GAAP profit margin are expected to be 43.5% and 26.7%.

The bank raised Tencent's target price by 9% to $50 (equivalent to HK$392.3), maintaining the rating “increase”.

The bank believes that China has recently resumed approval for new games, and WeChat's advertising demand is also recovering. Although Tencent games have not yet been approved, it believes this is just a matter of the order of applications. There is no need to worry. It is expected that game revenue for the second quarter of this year will also have to be restored, and no representative games have been launched from the fourth quarter of last year to the first quarter of this year. It is believed that related businesses are still in a transition stage.

At the same time, WeChat is being capitalized. Demand mainly comes from SME advertisers, and the mini program also helps increase user stickiness.