【行业研究报告】腾讯控股-Steady ship and aim for sustainable growth

23Mar2023
CMBInternationalGlobalMarkets|EquityResearch|CompanyUpdate
Tencent(700HK)
Steadyshipandaimforsustainablegrowth
Tencentreported4Q22resultson22March:totalrevenuegrewby1%YoYto
RMB145bn,inlinewithconsensus/CMBIestimates.FY22totalrevenuedeclined
1%YoYtoRMB554.6bn.Non-IFRSnetincomegrewby19%YoYto
RMB29.7bnin4Q22,versusconsensus/CMBIestimateofRMB30.8/30.2bn.
Theearningsgrowthwasmainlyduetoenhancedoperatingefficiencyandlow-
baseeffect.Full-yearnon-IFRSnetincomewasdown7%YoYtoRMB115.6bn
inFY22.WeraiseFY23-24Enon-IFRSnetincomeforecastby3-6%on:1)solid
recoveryofhigh-marginadbusiness;2)improvedadsandFBSGPM;and3)
betteroperatingefficiency.OurSOTP-derivedtargetpriceisadjustedto
HK$455.0(previous:HK$450.0).MaintainBUY.
Inlinegamesrevenuegrowth;addeliveredstrongbeatin4Q22.
Domesticgamesrevenuedeclinedby6%YoYtoRMB27.9bnin4Q22.
Domesticgamesrevenuedeclinedby6%YoYtoRMB27.9bnin4Q22.
Internationalgamesrevenuegrew5%YoY(or+11%ifexcl.currencyand
one-offimpact)toRMB13.9bnin4Q22,supportedbythesuccessful
launchesofNIKKEandDarktidein4Q22.Onlineadrevenue(17%oftotal
revenue)recorded15%YoYgrowthin4Q22,beatingourexpectation,
mainlydrivenbystrongperformanceofVideoAccountsandMiniProgram
ads.UsertimespentonVideoAccountstripledYoYandreached1.2xthat
ofMomentsin4Q22.Tencentwillfurtherexploremonetizationopportunities
ofVideoAccountsinFY23,suchaslivestreamingtipping,in-feedadsand
livestreaminge-commerce.
FBSaimforrecoveryandmoresustainablegrowth.Fintechand
BusinessServices(FBS)revenuedeclinedby1%YoYin4Q22(33%oftotal
revenue),asthefintechbusinesswasimpactedbyCOVID-19andcloud
businessreducedloss-makingactivities.Theoptimizedcoststructure
supportedFBSGPMtoimproveby6.4pptYoYin4Q22.Fintechbusiness
sawsolidrecoveryin1Q23,withYTDdailyaveragecommercialpayment
volumebacktodouble-digitYoYgrowth.Cloudbusinesscompletedthe
strategicadjustmentforamoresustainablemodelandaimsforbetter
growthoutlookinFY23,permanagement.Themanagementalsoillustrated
theirstrategiesforgenerativeAItoamplifygrowthacrossbusinesseslines:
1)rollingoutitsself-developedfoundationmodel;2)leveragingAI
capabilitiestoenhanceinnovation,monetizationandoperationalefficiency.
StrongearningsreboundpotentialoverFY22-25.OverallGPM
expandedby2.5pptYoYto42.6%in4Q22,supportedbystronggrowthof
higher-marginadbusiness(+15%YoY)andenhancedGPMofFBS
business(+6.4pptYoY).S&Mexpensesdeclinedby47%YoYandwas
equivalentto4.2%oftotalrevenuein4Q22(4Q21:8.1%).Thesedrovenon-
IFRSnetincometogrow19%YoYin4Q22.Weestimaterobustnon-IFRS
netincomeCAGRof17%overFY22-25E,whichjustifiedTencent’scurrent
corevaluation(excl.strategicinvestment)of17x23Enon-IFRS.