In a research report, Jefferies maintained its forecast for TENCENT (00700.HK) +12.200 (+3.170%) Short selling $2.10B; Ratio 19.325% 's 2Q24 total revenue growth of 8%, mainly due to the solid performance of its online game business and its efforts to revitalise its legacy game business. Uncertainty in the macro environment regarding payments and IT spending has driven the broker to adjust its assumptions for technology and business services.
By market segment, Jefferies expected TENCENT's domestic and overseas game revenues to grow about 6% YoY, compared to the earlier estimate of 3% YoY, mainly due to the strong execution of existing game strategies. Online advertising revenue is projected to grow around 17% YoY, compared to the earlier estimate of 15% YoY, mainly due to upgraded advertising infrastructure and improved video account strength. Financial technology and business services (FBS) revenues are forecasted to grow 4% YoY, compared to the earlier estimate of 6% YoY.
The broker estimated TENCENT's non-GAAP net profit to lift 26% YoY to RMB47 billion in 2Q24 and believed that its high-quality growth strategy would continue working in the quarter.
Based on the above factors, Jefferies raised its target price on TENCENT from $480 to $484 and maintained its Buy rating.
(HK stocks quote is delayed for at least 15 mins.Short Selling Data as at 2024-07-12 16:25.)
