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

Tencent Holdings Ltd (700 HK) - Q2 2023 Correction Presents a MT Buying Opportunity at 302/330

Tencent Holdings Ltd (700 HK) - Critical Weekly Close Awaits - 302/330 Buy Zone Achieved in May

Tencent Announced Game Pipeline in Annual Conference "Spark 2023", and Our Estimations

China/Asia TMT

Shawn Yang

Equity Bottom-Up

<ul>
<li>We estimate that Tencent 1Q23’s rev./non-IFRS net income beat cons. by 3.6%/4.5%. We forecast that VAS/ads/others will have 6.5%/15.3% /17.6% YoY growth in 1Q23. </li>
<li>We maintain BUY rating for Tencent because of 1) video account, especially the rapid growth of Wechat Beans (微信豆); and 2) recovery of ads revenue from Ecommerce and gaming.</li>
<li>We remove Tencent from our top buy ideas because: 1) current consensus has been high; 2) lack of hit title in upcoming pipeline; and 3) launch of DNF casts shadow</li>
</ul>


We estimate that Tencent 1Q23’s rev./non-IFRS net income beat cons. by 3.6%/4.5%. We forecast that VAS/ads/others will have 6.5%/15.3% /17.6% YoY growth in 1Q23. 
We maintain BUY rating for Tencent because of 1) video account, especially the rapid growth of Wechat Beans (微信豆); and 2) recovery of ads revenue from Ecommerce and gaming.
We remove Tencent from our top buy ideas because: 1) current consensus has been high; 2) lack of hit title in upcoming pipeline; and 3) launch of DNF casts shadow


[Tencent (700 HK, BUY, TP HK$433) Earnings Preview]: Still a BUY, but Not Our Top Pick