Morgan Stanley keeps Tencent at Overweight, with target price at HK$420

 

>>REAL-TIME UPDATES IN THE WIRE. CLICK HERE<<<

 

 

Tencent Holdings’ fourth-quarter revenue was expected to grow by 1% year over year, fueled mainly by the recovery of international game business and strong growth of Video Accounts business, Morgan Stanley said in a research note. 

Tencent should hail multiple revenue growth catalysts this year, with its major IPs receiving game licenses being one of the key highlights, it said. 

Morgan Stanley expects Tencent’s total revenue in the fourth quarter to decline by 2% on year, with mainland game revenue falling 5% and international game revenue rising 3%. Online game revenue is expected to grow by 8% on year, which would be the first year-on-year growth since the start of 2022, mainly driven by acceleration of monetization of Video Accounts and strong e-commerce demand, it said.

The bank kept the forecast of Tencent’s revenue in 2022-24 largely unchanged, but raised the forecast of non-GAAP operating profit in 2023 by 1% to reflect the margin improvement from Video Accounts and cloud-computing expansion, it said.