Open-source Securities: Maintaining a "buy" rating on TENCENT (00700), accelerated monetization of WeChat ecosystem may continue to drive performance growth.

Open Source Securities has released a research report stating that it maintains a "buy" rating for Tencent (00700) and expects the company's net profit attributable to shareholders to be 155.7/182.8/206.5 billion yuan from 2023 to 2025. The research report is optimistic about the company's performance growth driven by the launch of new games and the commercialization of Video Number. In 2023 Q3, the company achieved operating revenue of 154.625 billion yuan (a year-on-year increase of 10.4% and a month-on-month increase of 3.6%), and achieved a non-IFRS net profit attributable to shareholders of 44.921 billion yuan (a year-on-year increase of 39.3% and a month-on-month increase of 19.6%). According to the report, the company has a rich reserve of games, and the upcoming launch of "Elemental Dream Star," "Tom Clancy's The Division 2," "Chess World Champion," and "Honor of Kings: Dawn of Stars" is expected to continue to drive growth in the gaming business. At the same time, WeChat mini-games are growing rapidly, with over 400 million monthly active users, and in-game purchases are expected to continue to contribute significant revenue growth to the company. In addition, the usage time of Video Number continues to grow rapidly, with a year-on-year increase in total video views of over 50% in 2023 Q3. Benefiting from the growth in video views and user engagement, Video Number's advertising revenue has shown a significant month-on-month increase, which may continue to drive growth in the advertising business.