HK Stock Price Fluctuated | Tencent (00700) rose over 4% in the morning, and the accelerated monetization of WeChat ecosystem may continue to drive performance growth.

Tencent (00700) rose over 4% in the morning, and as of the time of writing, it has increased by 4.06%, reaching HKD 328, with a transaction volume of HKD 4.602 billion. Open Source Securities pointed out that Tencent has a rich reserve of games, and the upcoming launch of games such as "Moonlight Connection," "Tom Clancy's The Division 2," "Chess Rush," and "Honor of Kings: Dawn of Stars" is expected to continue driving the growth of the gaming business. At the same time, WeChat Mini Games are growing rapidly, with over 400 million monthly active users, and in-app purchases in Mini Games are expected to continue to contribute significant revenue growth for the company. In addition, the usage time of Video Accounts is growing rapidly, with a year-on-year increase of over 50% in total video views in Q3 2023, and with the growth in views and user engagement, video account advertising revenue has shown significant growth, which may continue to drive advertising businesses. Morgan Stanley has previously stated that Tencent has had a valuation premium due to its strong revenue growth and transparent profitability. The recent acceleration in share repurchases also supports the stock price performance. Positive factors driving profit growth include the global expansion of the gaming business, monetizing social network advertising, offering more financial technology products, and strategic improvements in consumer and industrial internet sectors. The bank predicts that natural growth in Tencent's profit margin can be sustained, stable growth in video account advertising business, and potential improvement in shareholder returns.