Today, for the current Tencent (stock code: 0700.HK), the business competitiveness analysis is divided into three parts: "social product ecology + game + financial technology", and the business corresponding to its operating income is divided into: (1) social and advertising services; (2) games; (3) fintech business services.
The main source of the company's profit is the value-added service business consisting of games and social networking, and the gross profit contribution accounts for about 60% of the company.
Value-added service business
Q1 revenue increased by 9% year-on-year to RMB 79.3 billion. Game revenue in the international market increased by 25% to RMB 13.2 billion, excluding the impact of exchange rate fluctuations, an increase of 18%, driven by the strong performance of the recently launched "Victory: Nicky" and "Triple Match 3D" and the stability of "VALORANT" driven by growth. Game revenue in the domestic market increased 6% to RMB 35.1 billion due to higher revenues from Honor of Kings, DnF and CrossFire mobile games, as well as incremental revenue from the recently launched Dark Zone Breakout. Social network revenue increased by 6% to RMB 31 billion, mainly driven by in-game virtual item sales and music paid membership services.
Internet advertising business
Q1 revenue increased by 17% year-on-year to RMB 21 billion, mainly due to the new revenue sources of video accounts, the increase of advertisements in mini programs and the recovery of mobile advertising alliances. Advertising expenditures in most industries increased year-on-year. Thanks to the recovery of consumption in China, advertising expenditures in most industries recorded year-on-year increases. At the same time, the upgraded advertising infrastructure further amplified the benefits
Financial Technology and Corporate Services Business
Q1 revenue increased by 14% year-on-year to RMB 48.7 billion. Compared with the fourth quarter of 2022, the year-on-year growth of financial technology services accelerated, mainly due to the recovery of commercial payment activities brought about by the rebound of consumption in China. During the period, the revenue of the enterprise service business turned positive year-on-year. This was due to the increase in sales of some cloud services and the first income from technical service fees related to live streaming transactions of video accounts.
After a thorough analysis of TENCENT's revenue, stock trends and financial data from the past few quarters, conducted by over 28 third-party financial analysts, 00700 Stock is rated as -- with a forecasted stock price of HK$445.495 (Average) for the next 12 months.28
- Target Price: HK$445.495
- Forecast of FY2023 Q3 EPS: HK$3.844
- Forecast of FY2023 Q3 Revenue: HK$167.6B
- Forecast of FY2023 Q3 EBIT: HK$49.6B
- The KDJ is currently at k:17.540 D:31.360 J:-10.101 , indicating a neutral signal.
- The OSC is currently at OSC:-1400.000 , indicating a bullish signal.
- The BIAS is currently at BIAS1:-3.150 BIAS2:-4.678 BIAS3:-4.945 , indicating a bullish signal.
- The RSI(12) is currently at RSI12:33.114, indicating a bullish signal.
- The RSI(24) is currently at RSI24:38.086, indicating a bullish signal.
- The MACD is currently at DIF:-5.407 DEA:-4.612 MACD:-1.591 , indicating a neutral signal.
- The MA is currently at MA5:296.720 MA10:303.320 MA20:303.000 MA30:307.387 MA60:320.517 , indicating a neutral signal.
- The BOLL is currently at MID:303.000 UPPER:316.195 LOWER:289.805 , indicating a neutral signal.
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