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

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Blue Lotus Non US Internet research, Blue Lotus Research Institute

Ying Pan

Blue Lotus Non US Internet research

Equity Bottom-Up

<ul>
<li>Tencent reported C3Q23 revenue, non-IFRS operating profit and IFRS net income (2.4%), 8.9% and 17% versus our estimates. The bottom-line beat was mainly due to the growth of high-margin businesses;  </li>
<li>We view commercialization of Video Accounts and expansion of overseas gaming are still at early stage.</li>
<li>Progression of these high-margin, high-quality business will persist into 2024;  We maintain BUY but raise target price to HK$ 432. </li>
</ul>


Tencent reported C3Q23 revenue, non-IFRS operating profit and IFRS net income (2.4%), 8.9% and 17% versus our estimates. The bottom-line beat was mainly due to the growth of high-margin businesses;  
We view commercialization of Video Accounts and expansion of overseas gaming are still at early stage.
Progression of these high-margin, high-quality business will persist into 2024;  We maintain BUY but raise target price to HK$ 432. 


[Tencent(700 HK, BUY, TP HK$432)Target Price Change]: More Sustained Growth Doesn’t Mean Slow Growth