Lyon: Maintains Tencent's "highly confident of outperforming the market" rating, expects revenue to continue steady growth.

Lyon released a research report stating that Tencent's total revenue and adjusted net profit for the third quarter increased by 15% and 18% respectively year-on-year to 192.9 billion yuan and 70.6 billion yuan, exceeding the bank's expectations by 1.5% and 4.5%. The performance of online games was particularly outstanding, with a 23% annual increase driven by the success of new games "Delta Force" and "Unswerving Contract Mobile Edition", as well as the growth of classic games such as "Honor of Kings", "Peace Elite" and "Clash of Clans". Marketing services accelerated by 21% annually, mainly driven by increased user engagement, advertising volume, and AI targeting technology. Financial technology and enterprise services also rebounded, driven by cloud services and e-commerce transactions. The bank expects revenue to continue to grow steadily, as the company has a rich gaming pipeline, more AI advertising tools, and growth in the small store business. The company expects the next generation of mixed reality models to be significantly upgraded, and to continue adding AI capabilities and Yuanbao services on WeChat. The bank maintains its "highly confident in outperforming the market" rating with a target price of HK$740.