UBS: Gives Tencent (00700) a "buy" rating with a target price raised to HK$593

UBS releases research report, anticipating that TENCENT (00700) will launch more new games soon. They believe this will help alleviate concerns about a potential slowdown in growth after a strong performance in 2024. They have raised the target price from 588 HKD to 593 HKD, with a "buy" rating, and have increased their earnings forecast per share for this year and the next by 1%. The report states that Tencent's gaming business is performing well, providing some visibility for profits. Data shows that Tencent's total game revenue in China during the Chinese New Year exceeded expectations, with an estimated double-digit percentage increase compared to the previous year. This growth is attributed not only to the success of the popular game "Dungeon & Fighter: Origin", but also to the ongoing success of their flagship games, such as "Honor of Kings" which launched new skins at different price points to cater to different user needs. UBS expects Tencent to benefit from three potential positive factors this year, including reduced market competition, internal growth of new users, and improved return on investment in the advertising business.