Tencent’s non-GAAP net profit is expected to surge 20.4% year over year to 33.9 billion yuan in the second quarter of the year, Citigroup said in a note.
The company’s online game revenue is expected to rise 9.8% year over year in the quarter to 46.7 billion yuan, it estimated.
Tencent’s upbeat performance in PC game launches in July will be followed by the release of a slew of decent titles in August, implying a potentially stronger game revenue growth in the third quarter but also meaning that the growth in the fourth quarter might be affected by the macroeconomic weakness and a higher base, it said.
For the third quarter, Citigroup forecast Tencent’s total revenue and non-GAAP net profit to rise by 12% and 12.6%, respectively, to 156.9 billion yuan and 36.3 billion yuan.
The target price on the stock was cut from HK$506 to HK$491, with rating maintained at Buy.