Lyon believes that Tencent (00700) can maintain a compound increase of 15 to 20% in earnings per share for three years.
The Zhitong Finance App learned that Lyon released a research report stating that maintaining the Tencent (00700) “buy” rating, it is believed that the company can maintain a compound three-year profit growth of 15% to 20%, with a total yield of 5% and a target price of HK$440.
According to the report, dragged down by the decline in domestic game revenue, Tencent's revenue growth is expected to slow to 5.9% in the first quarter, reaching 158.9 billion yuan. However, net profit is expected to maintain a healthy year-on-year increase of 15.6% to RMB 53.2 billion before the adjusted net profit.
The bank expects that with the stable revenue performance of Tencent's top two games, accelerated monetization of second-tier games, and the launch of new games such as the “DNF” mobile game, it is believed that online game revenue will resume growth in the second quarter. As for overseas game revenue, Supercell's new game “Squad Busters” will be released this month.