Lyon: Maintain "Outperform" rating on TENCENT (00700) with a target price of 500 Hong Kong dollars.

Lyon released a research report stating that TENCENT (00700) will maintain its "outperform" rating with a target price of 500 Hong Kong dollars, with its profit forecasts remaining largely unchanged. The report mentions that benefiting from accelerated growth in online games, it is expected that TENCENT's performance in the fourth quarter of last year will continue to be stable. It is estimated that revenue and adjusted EBIT will increase by 8.3% and 21.7% respectively, reaching 168 billion and 60 billion RMB, mainly driven by the gaming and advertising businesses. The bank believes that with the success of "Dungeon & Fighter" mobile game, "Delta Force" and "Path of Exile 2", coupled with the steady performance of continuously popular games, Tencent's gaming revenue is expected to accelerate to a 15% year-on-year growth. In addition, the bank also expects Tencent's advertising revenue to increase, mainly due to increased advertising spending and technological advancements.