Haitong International: Expects Tencent Holdings' adjusted operating profit in the second quarter to increase by 15% year-on-year, maintaining an "Outperform" rating
Haitong International expects Tencent Holdings' adjusted operating profit for the second quarter to grow by 15% year-on-year, maintaining an "outperform" rating. The firm predicts Tencent's revenue for the second quarter will increase by 11% year-on-year to RMB 179 billion, with non-International Financial Reporting Standards operating profit at RMB 67 billion. Although the growth expectations for the gaming business are slowing, new games are expected to offset some of the impact, and advertising revenue is projected to rise by 18% year-on-year
According to the Zhitong Finance APP, Haitong International released a research report stating that Tencent Holdings Limited (00700) will announce its second-quarter results, which are expected to generally meet market expectations, maintaining a forecast of an 11% year-on-year revenue growth to RMB 179 billion, in line with market consensus; the non-International Financial Reporting Standards operating profit forecast remains at RMB 67 billion, representing a year-on-year growth of 15%, slightly below market expectations. The target price is maintained at HKD 620 with an outperform rating, optimistic about its competitive advantages in areas such as AI.
Haitong International pointed out that due to seasonal factors, the growth expectation for the gaming business in the second quarter is slowing down, with flagship games such as "Honor of Kings" and "Peacekeeper Elite" expected to record a decline in revenue. However, new games like "Delta Operation" and "DNF Mobile" are expected to offset some of the impact, while overseas games are believed to perform steadily. The bank slightly adjusted Tencent's second-quarter and full-year gaming revenue forecasts to RMB 56 billion and RMB 230 billion, representing year-on-year growth of 16% and 17%.
The bank expects Tencent's second-quarter and full-year advertising revenue forecasts to remain at RMB 35 billion and RMB 144 billion, with year-on-year increases of 18% and 19%; it slightly lowered the FBS business's second-quarter and full-year revenue forecasts to RMB 53 billion and RMB 223 billion, with year-on-year increases of 6% and 5%. Haitong International currently forecasts Tencent's second-quarter and full-year non-International Financial Reporting Standards operating profit to be RMB 67 billion and RMB 271 billion, with year-on-year growth rates expected to reach 15% and 14%
