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<Research>CMBI Lifts TENCENT TP to $525, Upbeat on Games Biz, Earnings Growth Outlook
Recommend 18 Positive 24 Negative 7 |
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CMBI, in its report, expressed optimism about the earnings growth prospects of TENCENT (00700.HK) in 2H24, given the accelerated growth of game revenue and the revenue contribution of high-margin businesses such as Video Account and Mini Games. In the long run, the potential policy stimulus of China to boost economic growth and consumption may favor Tencent’s FBS (fintech and business services) and advertising businesses. CMBI said that the overall consumer sentiment remained relatively weak in 3Q24, continuing to hamper Tencent's fintech business. Consequently, the FBS revenue forecast for 3Q24 was slightly lowered. The broker expected that Tencent's total revenue for 3Q24 will climb 8% YoY to RMB166.8 billion, and non-IFRS net profit will gain 24% YoY to RMB55.6 billion. Despite the recent rebound in Tencent's share price, Tencent’s current valuation of 14x FY25E PE remains attractive, considering its earnings growth prospects and shareholder returns, CMBI said. The target price was revised upward from $480 to $525. The rating of Buy was maintained. AAStocks Financial News |
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