Guohai Securities released a research report stating that maintaining the “buy” rating of Tencent Holdings (00700) and considering the abundant reserves of game products and the continued release of commercial potential in video accounts and e-commerce in 2024, the estimated revenue for 2023-2025 will be $6105/6699/741.5 billion yuan, respectively, and net profit attributable to non-IFRS will be $1551/1836/203.8 billion. The corresponding non-IFRSEPs are $16.44/19.47/21.61, with a target price of HK$412.
According to the report, according to industry research, the video channel's DAU time in 2023 increased strongly year-on-year, with an average monthly DAU reaching 450 million, and the average daily usage time per person was 54 minutes. Relying on the WeChat ecosystem, video account user behavior has obvious social attributes, and content dissemination efficiency is high. According to Xinwang Data, the number of likes received on the 7-day video channel accounts for 79.8% of the 30-day likes, and user retweets account for 39.3% of the interactive index, which is higher than that of other major competitors. The overall content tone of video accounts is biased towards pan-life, pan-information, and pan-knowledge categories. From 2021 to 2023, emotional, social and current affairs, and lifestyle content led the video channel users' consumption content category, but the concentration of leading categories declined, and the overall content ecosystem became more diverse.
The bank said that compared to video accounts, Douyin and Kuaishou's creator support system is more complete, and traffic and cash incentives are stronger. Video accounts currently mainly use traffic incentives. It is expected that support for creators will continue to be increased in the future, and commercial infrastructure construction will be strengthened to help creators monetize content and traffic. According to the bank's estimates, Douyin is relatively ahead in the average income level of creators in 2023, followed by Kuaishou, and the video number is about half that of Kuaishou. According to research, since 2021, the proportion of social recommendations followed by video accounts and likes from friends has continued to decline, and the share of machine recommendations has continued to increase. As of 2023Q3, the proportion of machine recommendations has exceeded 50%. According to Xiaolong Zhang, the father of WeChat, the ideal state is 1:2:10 (1 video followed, 2 liked by friends, and video recommended by 10 machines).