BOCOM INTL: Tencent's mobile gaming revenue in September stabilized compared to the previous year, optimistic about Netease-S's continued strong growth momentum in the PC gaming sector.

BOCOM INTL released a research report stating that TENCENT (00700/buy, current price corresponds to 21.0 times 2025 P/E ratio) saw stable year-on-year mobile game revenue in September, with strong performance in the domestic version of "Delta Operation" and the international version of "Clash Royale" offsetting the impact of a high base number. Other mature games remained steady, with a rich pipeline of new games expected to contribute to revenue growth and support steady performance. It is estimated that AI applications will continue to promote efficiency optimization and drive profit release, with potential for long-term valuation improvement. Netease Inc Sponsored ADR (NTES.US/09999/buy, current price corresponds to 17.5 times 2025 P/E ratio) saw continued year-on-year growth in mobile game revenue, with strong momentum expected to continue in PC games and minimal downside in valuation. Key points from BOCOM INTL: TENCENT The launch of new games eased the impact of the high base number on domestic mobile game revenue, with the domestic version of "Delta Operation" and the international version of "Clash Royale" maintaining strong performance. Domestic revenue decreased by 2.7 billion yuan/8% year-on-year, mainly due to the high base number of "MDnF," partially offset by the new games "Unyielding Covenant: Source Energy Action"/"Delta Operation." "Delta Operation" set a new record in September with revenue reaching 1.5 billion yuan, driven by continuous user growth (domestic daily active users exceeding 30 million). "Unyielding Covenant: Source Energy Action" saw revenue of 400 million yuan in September, maintaining a stable ranking of 8-12 on the iOS top-selling games list in early October. Overseas revenue increased by 670 million yuan/9% year-on-year, mainly due to the incremental revenue from "Clash Royale" offsetting the high base number of "Brawl Stars." "Clash Royale" continued its revenue growth trend, with revenue exceeding 750 million yuan in September, increasing by 360%/7% month-on-month/year-on-year. Netease Inc Sponsored ADR Increased revenue from new overseas games. Domestic revenue increased by 70 million yuan/1% year-on-year, with the contributions of new games such as "Yanyun Sixteen Sounds" and "Egg Party" offsetting the impact of high base numbers from games like "Justice." Overseas revenue increased by 160 million yuan/18% year-on-year, benefiting from the incremental revenue from new games such as "Destiny: Rising" (revenue exceeding one billion yuan in September) and "Marvel's Secret Magic Surge." Hot topics 1) Tencent explores interactive film and game, releasing "Shengshi Tianxia: Queen's Game" on September 9 with total sales exceeding one million. 2) In September 2025, 145 domestic game licenses were issued, along with 11 imported licenses. It is recommended to pay attention to Tencent's open-world RPG cross-platform game "Guihuan" and the progress and launch plans of Mihoyo's new game "Houkai: Cause Spirit."