China growth and global non-US Internet equities

Blue Lotus Research Institute

Blue Lotus Research is a Hong Kong Type 4 Licensed investment advisory firm focusing on Chinese growth equities and global non-US Internet equities

EQD | Tencent (700 HK): Use Derivatives to Protect Recent Gains

Tencent/Netease: Tencent Behind Smaller Peers in This Year Game Approval

China Internet Weekly (12Dec2022): Bilibili, Tencent, JD.com

China Internet Weekly (2Jan2023): Alibaba, Tencent, Douyin, Bilibili, Uxin

Gravity Works As WeWork Doesn't; Now Plan B

China/Asia TMT

Shawn Yang

Equity Bottom-Up

<ul>
<li>Our Tencent 4Q22’s rev. is in line, while non-IFRS net income would beat cons. by 5.2%. We estimate that top and bottom line will grow 13%/14% YoY in 2023.</li>
<li>We suggest major business lines see turning points in 4Q22, supported by rebound of Peacekeeper Elite’s gross billings, approval of new game codes, monetization of Wechat Video Account, etc.</li>
<li>Tencent is one of our top picks. Video Account, global game publishing, and margin beat are three major catalysts. Our TP HK$ 407 implies 26.1X PE in 2023.</li>
</ul>


Our Tencent 4Q22’s rev. is in line, while non-IFRS net income would beat cons. by 5.2%. We estimate that top and bottom line will grow 13%/14% YoY in 2023.
We suggest major business lines see turning points in 4Q22, supported by rebound of Peacekeeper Elite’s gross billings, approval of new game codes, monetization of Wechat Video Account, etc.
Tencent is one of our top picks. Video Account, global game publishing, and margin beat are three major catalysts. Our TP HK$ 407 implies 26.1X PE in 2023.


Tencent(700.HK) 4Q22 Preview:Turning Points Are Emerging