HK Stock Market Move | TENCENT (00700) rose nearly 3% in the morning, with the company's fundamentals still well regarded by institutions after 25 years. Attention is focused on the launch of new AI features.

TENCENT (00700) rose nearly 3% in the morning, by the time of writing, it was up 2.63% at HKD 389.8, with a turnover of HKD 7.283 billion. Huatai released a research report predicting that Tencent's 4Q24 revenue will increase by 8% year-on-year, and adjusted net profit will increase by 25% to 53.5 billion, which is basically in line with VA's expectations. Domestic game revenue in 4Q is expected to accelerate (+18% yoy), while advertising revenue may slow down to 13% year-on-year due to Olympic advertising overspending, and financial technology revenue growth is expected to recover to 4%. After Tencent was included in the CMC list on January 7th, market sentiment may be affected in the short term, however, the bank continues to be optimistic about Tencent's fundamentals for the next 25 years, with important catalysts coming from: 1) Tencent may release new AI features this year to empower mobile applications and improve user stickiness, 2) the loading rate of video ads is expected to continue to rise, and 3) the expected monthly revenue of the mobile game "Unlimited Contract" is 5-10 billion. Huaxing Securities pointed out that one of the new tools introduced by WeChat Mini Store in December 2024 is the "send a gift" function, to leverage its social network and help platform merchants grow. Although monetization is not the focus at present, the bank expects Tencent to eventually earn commissions and advertising revenue from sales on the WeChat Mini Store GMV. Looking ahead to 2025, the bank predicts a 5% year-on-year growth in revenue for the financial technology and enterprise services sectors, an improvement from the 2H24 performance, with overall economic and consumer spending expected to improve by then.