Tencent Holding’s total revenue for the second quarter of 2022 is expected to drop by 3% from a year earlier to 134.8 billion yuan and its adjusted net profit may have slumped by 26% year over year to 25.1 billion yuan.
By business segment, the tech giant’s second-quarter mobile revenue may slightly dip 1% year over year given China’s soft performance and slowdown in international game unit under post-Covid traffic normalization, weak macro environment and absence of big titles, the bank estimates. Advertising revenue will likely drop 27% from a year earlier due to the impact of Covid lockdownton demand and a high base, it said.
Overall, the bank maintain an Outperform rating for Tencent, but cut target price from $474 to $437. It lowered the forest of Tencent’s 2022-23 earnings per share by 1% and 5%, respectively. The group may lack re-rating catalysts over the near term, it added.