Tencent Holdings Limited: Strong Financial Performance and Growth Prospects Justify Buy Rating

Analyst Julia Pan of UOB Kay Hian maintained a Buy rating on Tencent Holdings Limited (TCTZF – Research Report), with a price target of HK$645.00.

Julia Pan has given her Buy rating due to a combination of factors including Tencent Holdings Limited’s strong financial performance and promising growth prospects. The company’s revenue increased by 11% year-over-year, aligning with market expectations, while its gross margin improved by 3 percentage points. Notably, the non-IFRS diluted earnings per share rose by 33% year-over-year, surpassing consensus estimates by 8%.
Additionally, Tencent’s domestic games revenue saw a significant acceleration, growing by 20.3% year-over-year, driven by the success of major games and new releases. The marketing services segment also demonstrated resilience with a 17% increase in revenue, supported by strong advertiser demand. Furthermore, Tencent’s plans to enhance shareholder returns through a 32% dividend increase and a substantial share repurchase program further bolster the positive outlook.

According to TipRanks, Pan is ranked #2435 out of 9393 analysts.

In another report released today, DBS also maintained a Buy rating on the stock with a HK$669.00 price target.