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<Research>CMBI Cuts TENCENT (00700.HK) TP to $445, Expects 1Q Non-IFRS NP to Hike 31% YoY
Recommend 9 Positive 23 Negative 9 |
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TENCENT (00700.HK) is still on track to improve margins, thanks to increased revenue contribution from high-margin businesses and operating leverage, CMBI wrote in a report. The company was also committed to improving shareholder returns. Its revenue in 1Q24 was projected to climb 6% YoY to RMB158.6 billion, non-IFRS net profit to rise by 31% YoY to RMB43.1 billion, and GPM to lift by 3 ppts YoY. The broker slightly cut TENCENT's total revenue forecast for 2024-2026 by 1%-2%, mainly reflecting the relative weakness of its game business, and lowered its TP from $450.5 to $445, while maintaining a Buy rating. The broker believed that TENCENT's game business is still facing pressure in the short term, with revenue in 1Q24 estimated to fall by 2% YoY, and to return to positive growth in 2Q24, with the launch of new games. Revenue from social networking services was also estimated to fade 2% YoY in 1Q24, primarily due to adjustment of Huya and TME's live streaming businesses, but partially offset by solid growth of mini-games revenue. AAStocks Financial News |
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