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<Research>HSBC Global Research Foresees TENCENT (00700.HK) 3Q Rev. to Rise 8% YoY, Non-IFRS OP to Grow 19%
Recommend 22 Positive 26 Negative 8 |
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TENCENT (00700.HK) continues to offer investors a favorable risk reward, having achieved margin expansion through changes in its revenue structure amid challenging macro conditions while offering a healthy shareholder return, HSBC Global Research said in a report. Assuming Tencent continues to spend $700 million a day on share buybacks for the reminder of the year, its total buyback amount for 2024 will be revised upward from $100 billion to $112 billion, and it will achieve faster growth. The strong growth of Tencent's games “Brawl Stars”, “Valorant” and “Fight of the Golden Spatula” can partially offset the macro challenges faced by advertising, fintech and business services, in the broker’s view. The revenue benefits of WeChat Pay's cooperation with Taobao Tmall will remain limited in the short term. Meanwhile, Tencent's advertising, fintech and business services (FBS) should benefit from the Chinese central government's stance of supporting economic growth. The broker also expected Tencent's revenue in 3Q24 to grow 8% YoY and non-GAAP operating profit to hike 19% YoY. In view of the above factors, the broker maintained Tencent's target price of $570 and Buy rating. AAStocks Financial News |
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