External broker reports(aggregated public sources), CMB International

CMB International

External broker reports(aggregated public sources)

Incorporated in Hong Kong, supported by the mainland and targeting in global market, CMB International Capital Corporation Limited (“CMBI”) is an integrated financial institution providing comprehensive and professional services. As a wholly-owned subsidiary of China Merchants Bank ("CMB"), by leveraging on the Group’s synergy and coordination in domestic and overseas markets, as well as CMB’s strong resources and outstanding social reputation, CMBI and its subsidiaries have been actively implementing diversified business strategies and set up an overall layout of main business segments including Corporate Finance, Asset Management, Wealth Management, Global Markets and Structured Finance, etc. Adhering to the philosophy of “being clients oriented and increasing our own values by the way of creating value for clients”, CMBI endeavors to provide quality and integrated financial services to institutional, corporate and individual customers both domestic and overseas including Hong Kong IPO sponsorship and underwriting, share placement and rights issue for listed companies, financial advisors, bonds issuance services, asset management, direct investment, wealth management, equity sales and trading, etc.

Equity Bottom-Up

<ul><li>Tencent announced its 4Q23 results on 20 Mar: total revenue grew by 7% YoY to RMB155.2bn in 4Q23, largely in line with our/consensus estimate of RMB156.1/157.4bn.</li><li>Non-IFRS net income was up by 44% YoY to RMB42.7bn in 4Q23, ahead of our/consensus estimate of RMB40.0/42.0bn, mainly due to solid GPM expansion (+7.3ppt YoY).</li><li>FY23 total revenue grew by 10% YoY to RMB609.0bn, and non-IFRS net income increased by 36% YoY to RMB157.7bn. </li></ul>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Tencent announced its 4Q23 results on 20 Mar: total revenue grew by 7% YoY to RMB155.2bn in 4Q23, largely in line with our/consensus estimate of RMB156.1/157.4bn.Non-IFRS net income was up by 44% YoY to RMB42.7bn in 4Q23, ahead of our/consensus estimate of RMB40.0/42.0bn, mainly due to solid GPM expansion (+7.3ppt YoY).FY23 total revenue grew by 10% YoY to RMB609.0bn, and non-IFRS net income increased by 36% YoY to RMB157.7bn. Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Tencent (700 HK) - Unleashing Business Model Advantages

Thematic (Sector/Industry)

<ul><li>Based on NBS data, 2M24 online retail sales GMV/online physical goods GMV reached RMB2.2tn/1.8tn, up 15.3/14.4% YoY, which implied a two-year CAGR of 10.7/9.8%.</li><li>The growth of total online retail sales GMV continued to outpace that of online physical goods GMV, which was likely due to the robust growth in online travel bookings during the CNY holiday.</li><li>Leading e-commerce platforms are prioritizing GMV and revenue growth over margin improvement in 2024, and guided to reinvest incremental operating profit generated to drive further business growth, which likely indicates more intensified industry competition. </li></ul>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Based on NBS data, 2M24 online retail sales GMV/online physical goods GMV reached RMB2.2tn/1.8tn, up 15.3/14.4% YoY, which implied a two-year CAGR of 10.7/9.8%.The growth of total online retail sales GMV continued to outpace that of online physical goods GMV, which was likely due to the robust growth in online travel bookings during the CNY holiday.Leading e-commerce platforms are prioritizing GMV and revenue growth over margin improvement in 2024, and guided to reinvest incremental operating profit generated to drive further business growth, which likely indicates more intensified industry competition. Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Internet - 2M24 online retail sales recap

<ul><li>We expect Tencent will continue to deliver quality earnings growth in 4Q23E and 2024E, supported by its operating leverage capacity, improving competitive positions in core business segments and incremental contribution from Weixin ecosystem innovation.</li><li>We expect non-IFRS NPM to rise from 21% in FY22 to 28% in FY25E, on favourable revenue mix shift to higher margin business (e.g. Weixin Video Account and mini games) and opex control.</li><li>Despite the potential slowdown in games revenue growth due to seasonality of monetization (especially in 4Q23), we are upbeat on Tencent’s long-term leadership in domestic games market and capability to address overseas games market. </li></ul>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

We expect Tencent will continue to deliver quality earnings growth in 4Q23E and 2024E, supported by its operating leverage capacity, improving competitive positions in core business segments and incremental contribution from Weixin ecosystem innovation.We expect non-IFRS NPM to rise from 21% in FY22 to 28% in FY25E, on favourable revenue mix shift to higher margin business (e.g. Weixin Video Account and mini games) and opex control.Despite the potential slowdown in games revenue growth due to seasonality of monetization (especially in 4Q23), we are upbeat on Tencent’s long-term leadership in domestic games market and capability to address overseas games market. Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Tencent (700 HK) - Weixin Monetization Shows Continuous Progression

<ul><li>China online games market revenue grew by 13.9% YoY to RMB303.0bn in 2023, representing a 2-year CAGR of 1.1%, according to GPC.</li><li>Online games market revenue recorded robust growth of 34.4% YoY in 2H23, underpinned by the launch of several blockbuster titles and the recovery of user paying willingness.</li><li>Despite the flattish user growth, ARPU was up 13% YoY to RMB453 in 2023. </li></ul>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

China online games market revenue grew by 13.9% YoY to RMB303.0bn in 2023, representing a 2-year CAGR of 1.1%, according to GPC.Online games market revenue recorded robust growth of 34.4% YoY in 2H23, underpinned by the launch of several blockbuster titles and the recovery of user paying willingness.Despite the flattish user growth, ARPU was up 13% YoY to RMB453 in 2023. Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

China Internet – 2023 Online Games Recap: Start of a New Growth Phase

<ul><li>Huawei's role in offering alternatives to foreign tech’s is prominent, but it's important to highlight the contribution of other smaller yet significant players in the development of home-grown solutions in China. </li><li>Nvidia faces significant revenue decline in China in the upcoming year to comply with US export curbs. The company is determined to protect its substantial revenue from the China market and expand its global presence aggressively to make up for the potential revenue loss from the China market.</li><li>Nvidia CFO said “China and other affected destinations consistently contributed approximately 2025% of data center revenue over the past few quarters”.</li></ul>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Huawei's role in offering alternatives to foreign tech’s is prominent, but it's important to highlight the contribution of other smaller yet significant players in the development of home-grown solutions in China. Nvidia faces significant revenue decline in China in the upcoming year to comply with US export curbs. The company is determined to protect its substantial revenue from the China market and expand its global presence aggressively to make up for the potential revenue loss from the China market.Nvidia CFO said “China and other affected destinations consistently contributed approximately 2025% of data center revenue over the past few quarters”.Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

China Semiconductor – Domestic AI Chip Makers Accelerating Their Push as Nvidia’s Alternatives

China

Tencent Holdings Limited operates as an investment holding company. The Company, through its subsidiaries, provides Internet and mobile value-added services (VAS), online advertising, and e-commerce transactions. Tencent Holdings offers services to users worldwide.

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Tencent Holdings (ADR) (TCEHY US)

Tencent (700 HK) - Unleashing Business Model Advantages

Tencent announced its 4Q23 results on 20 Mar: total revenue grew by 7% YoY to RMB155.2bn in 4Q23, largely in line with our/consensus estimate of...

CMB International

Internet - 2M24 online retail sales recap

Based on NBS data, 2M24 online retail sales GMV/online physical goods GMV reached RMB2.2tn/1.8tn, up 15.3/14.4% YoY, which implied a two-year CAGR...

CMB International

Tencent (700 HK) - Weixin Monetization Shows Continuous Progression

We expect Tencent will continue to deliver quality earnings growth in 4Q23E and 2024E, supported by its operating leverage capacity, improving...

CMB International

China Internet – 2023 Online Games Recap: Start of a New Growth Phase

China online games market revenue grew by 13.9% YoY to RMB303.0bn in 2023, representing a 2-year CAGR of 1.1%, according to GPC.

CMB International

China Semiconductor – Domestic AI Chip Makers Accelerating Their Push as Nvidia’s Alternatives

As the US tightens China’s access to advanced chips, we maintain our earlier view that domestic companies will look for Nvidia’s alternatives at a...

CMB International

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