CICC: Maintains Tencent's target price of 600 Hong Kong dollars and unchanged "outperform" rating in the industry.

China International Capital Corporation (CICC) released a report, maintaining Tencent Holdings' target price of 600 Hong Kong dollars and the "outperform" rating unchanged, and raising its revenue forecasts for the current and next year by 2% and 4%, to 730.836 billion yuan and 784.196 billion yuan. Tencent's first quarter revenue increased by 13% year-on-year to 180 billion yuan, exceeding CICC's expectations by 2.4% and market expectations by 2.5%, mainly driven by better-than-expected game and advertising revenue; non-International Financial Reporting Standards (IFRS) profit increased by 22% to 61.3 billion yuan, also surpassing CICC and market expectations by 1% and 3% due to higher-than-expected gross profit margins in multiple businesses. Based on the rapid growth of Tencent's advertising and gaming revenue, CICC has raised its revenue forecasts for the current and next year. However, Tencent still faces regulatory risks, new game launches falling short of expectations, and higher-than-expected costs or expense rates. CICC expects Tencent's non-IFRS profit for the current and next year to be 254.657 billion yuan and 280.284 billion yuan, with expected price-to-earnings ratios of 20.1 times and 18 times for the current and next year, respectively.