Source: Broker China
Author: Xu Ying

Recently,$TENCENT (00700.HK)$The new mobile game “Dungeons and Warriors” continues to receive market attention. According to estimates by a third-party game research company, since the game was released on May 21, the first week of the game's revenue will exceed 140 million US dollars.

On the other hand, Tencent Holdings continues to maintain repurchase efforts in the secondary market. On May 29, Tencent Holdings spent about HK$1 billion to repurchase 2.68 million shares on the Hong Kong Stock Exchange. This is the 9th consecutive trading day since May 17. Since 2024, the cumulative repurchase amount of Tencent Holdings has exceeded HK$30 billion.

New “money making machine”

According to market intelligence company Sensor Tower, since its release on May 21, the “Dungeons and Warriors” mobile game (DNF mobile game for short) has received 63 million US dollars in revenue on Apple's China App Store. Gaming research firm Niko Partners estimates that this means players will spend more than $140 million on all mobile platforms, including the Android Store.

According to Sensor Tower data, the DNF mobile game topped China's download and revenue rankings in the past week, with 2.6 million iPhone downloads.

According to the May 27 research report of Tianfeng Securities, the DNF mobile game ranked well on the iOS bestseller list, and the annual sales performance more than exceeded expectations. In the first quarter of this year, Tencent Holdings showed a clear upward trend in game growth, as well as an increase in gross margin that continued to exceed expectations, and market profit expectations entered an upward revision channel. Maintain a target price of HK$476 and maintain a “buy” rating.

It is worth mentioning that at the 2024 Tencent game press conference held on the evening of May 28, Tencent Games released the latest updates on its 34 game products, including 13 key new game products.

According to the press conference, Tencent's first open world racing mobile game “Need for Speed: Assemble” will be released in July this year; the MMORPG (Massively Multiplayer Online Role Playing) game “Taris World” National Service will go live on both ends on June 19, and the game will also be officially launched overseas on June 21. According to a previous disclosure by the National Press and Publication Administration, “The World of Taris” received the edition number in December 2023.

According to the Sensor Tower store intelligence platform, in April 2024, a total of 39 Chinese manufacturers were selected in the top 100 global mobile game publisher revenue list, drawing a total of 2.07 billion US dollars, accounting for 40.2% of the revenue of the world's top 100 mobile game publishers in this issue. Judging from the April revenue rankings of mobile games, Tencent's “Wang Zhe Rongyao”, “Peace Elite”, and Miha's “Genshin” ranked in the top three.

Ongoing buybacks

In terms of stock price performance, since Tencent's stock price hit an intraday high of HK$400 on May 17, the stock price of Tencent Holdings recently revised slightly. Meanwhile, Tencent continues to buy back.

According to Oriental Wealth Choice data, as of May 29, Tencent Holdings has repurchased a total of 22.1 million shares since May, with a cumulative repurchase amount of HK$8.439 billion.

Since 2024, Tencent Holdings has repurchased a total of 95.8 million shares, with a cumulative repurchase amount of HK$30.283 billion.

Judging from monthly data, Tencent Holdings made the most repurchases in January, with a total of 13 trading days. In January, it spent a total of HK$9.825 billion to repurchase 34.11 million shares, with an average repurchase price of about HK$288.03 per share. Since then, Tencent has once again launched a new round of repurchases from late March to April 12. The repurchase amounts in March and April reached HK$5.01 billion and HK$7.09 billion, respectively. The average repurchase prices were around HK$296 per share and HK$309 per share, respectively.

Earlier, Tencent mentioned in its 2023 annual report that it will invest no less than HK$100 billion to repurchase shares in 2024, which is more than double the 2023 repurchase amount. In 2023, Tencent's share repurchase amount reached HK$49 billion, a record high in the past ten years.

Editor/jayden