Everbright Securities released a research report stating that maintaining the “buy” rating of Tencent Holdings (00700), the 3q23 non-IFRS net profit increased significantly, and maintained the continuous optimization of operating leverage under the pro-cyclical recovery of performance and cost reduction and efficiency. The non-IFRS net profit forecast for 23-25 was 1543.3/1843.5/204.23 billion yuan, with a target price of HK$430. Although the subsequent development of “Yuanmeng Star” is slightly weak, the bank believes that this does not mean that Tencent's competitive advantage in the Big DAU game is weakening. After “Yuanmeng Star,” Tencent still has many game products worth focusing on in 24 years and beyond. Their performance may drive the game business to maintain ideal growth, which is expected to boost market confidence in the company's game business.

According to the report, 1) “Egg Boy Party” has been in operation for a long time and has completed the consolidation of the player community to a certain extent. “Yuanmeng Star” was launched on 23M12. The gap with “Egg Boy Party” is over a year and a half. The player communication part has been completed, and elements such as gameplay and UI have become accustomed to users. 2) “Egg Boy Party”'s marketing investment and campaign promotion efforts are no less powerful than “Yuanmeng Star”. 3) Compared to “Egg Boy Party” users, “Yuanmeng Star” users are older, and their participation in party games needs to be cultivated. Looking forward to the future: The casual party game circuit is improving, meeting the demand for entertainment consumption under the weak economic recovery. Exploring differentiated user styles and integrating multiple game genres, and focusing on the “Yuanmeng Star” key node flow data, it is still expected to contribute to Tencent's 24-year performance.

The bank mentioned that Tencent still has many new products with large volume potential, and is paying attention to “DNF Mobile Games” and “Operation Delta.” 1) The release number exceeded expectations, and “DNF Mobile Game” is expected to contribute to stable profits. NEXON's mobile game revenue in China was about 4.5 billion yuan in 23 years, and the prospects for commercialization of mobile games are even higher. The 24M2 “DNF” Internet cafe game popularity list is 5th, and it still maintains a high level of fan enthusiasm. The horizontal action mobile game has low screen requirements and still has potential. The first-month turnover of “Crystal Core” of the same type is estimated to exceed 700 million yuan. 2) Cooperate with Ubisoft to develop the classic big IP mobile game “Assassin's CreedJade” and look forward to the launch performance. Attention: “Operation Delta” reexplores the 3A tactical shooter mobile game; “Star Breaking Dawn” has Wang Zhe IP and mature fighting gameplay. The launch of the game is expected to exceed expectations: 1) the performance side supports Tencent's game growth in 24 years and is expected to form a product cycle market; 2) the valuation side is expected to regain confidence, and Tencent is still strong in the direction of changing hands on the big IP side and “national level” games. 23H2 Tencent Games invested more times than 23H1, adding the parent company of “NIKE” and “Black Myths: Goku”.