20170104-招商证券_香港_-腾讯控股-00700.HK-Global_gaming_titan_conquering_new_fertile_territories_54页_5mb_5mb

报告摘要

Tencent (700 HK) Summary

Core Content

Tencent, a leading global gaming and social media company, is positioned to benefit from key internet trends in 2017, including a shift to user engagement and monetization, increased investment in content and infrastructure, and rising mobile ad spending. Despite margin pressures from these investments, Tencent's long-term growth drivers remain strong.

Main Points

Gaming Segment: Mobile games continue to be Tencent's primary revenue source and key growth driver, expected to grow at 40% CAGR in FY16-18E. Online gaming revenue is projected to grow at 27% in FY17E, with mobile gaming growth significantly outperforming PC gaming.
Advertising: Tencent's advertising business is still in its infancy, with a projected 46% CAGR, outpacing the more mature advertising business of Facebook. It is expected to gain share due to strong performance-based advertising growth.
Payment Business: The payment segment is growing rapidly at 63% CAGR in FY16-18E, driven by the shift to online B2C transactions and internet finance penetration. While not yet profitable as an infrastructure business, it has huge monetization potential.
Social Network (SNS): The SNS segment has significant monetization potential, with a 22% CAGR in FY16-18E. The launch of mini-programs is expected to be a catalyst for growth.
Earnings Growth: Tencent is expected to show strong non-GAAP diluted EPS growth in FY17E, at 30%, outperforming its global and China peers. It is currently trading at 20x EV/EBITDA, which is lower than the average of its Chinese peers (23x).
Valuation: The target price is HK$230, based on a SoTP model with multiples of 13.5x EV/EBITDA for online gaming, 30x for SNS, 40x for payment, and 1.2x PEG for advertising. This is equivalent to 35x FY17E non-GAAP earnings.
Investment Thesis: Tencent is well positioned to benefit from global internet trends, with a strong game pipeline, global expansion, and diversification into new segments. However, it may face margin pressure and competition in the coming quarters.
Key Events: The launch of WeChat's mini-program on 9 January 2017, the earnings call in mid-March, and the annual GAD event in May are expected to be catalysts for the share price in 1H17.

Financial Highlights

Metric	FY14	FY15	FY16E	FY17E	FY18E
Revenue (RMB mn)	78,932	102,863	151,399	204,382	261,810
Revenue Growth	31%	30%	47%	35%	28%
Non-GAAP Net Profit (RMB mn)	24,224	32,410	44,341	57,521	76,081
Net Profit Growth	43%	34%	37%	30%	32%
Non-GAAP Diluted EPS (RMB)	2.59	3.44	4.67	6.03	7.92
DPS (RMB)	0.28	0.40	0.56	0.69	0.90
P/E (x)	66.9	50.4	37.1	28.7	21.9
P/B (x)	20.4	13.7	10.3	7.9	6.1
ROE	34%	28%	29%	27%	27%

Key Investment Highlights

Gaming: Mobile games remain the key driver with 40% CAGR in FY16-18E. Expected to account for 44% / 50% / 57% of total online gaming revenue.
Advertising: Strong P4P growth expected to lead to further share gains. Growth rate of 46% CAGR vs. Facebook's more mature advertising business.
Payment: Expected to grow at 63% CAGR in FY16-18E, driven by online B2C transactions and internet finance.
Social Network: Monetization potential is huge with 22% CAGR. Mini-program launch is a near-term catalyst.
Valuation: Attractive with 20x EV/EBITDA and 0.9x PEG. Valuation is below Chinese peers on average.

Valuation Scenarios

Scenario	Online Games	SNS	Online Advertising	Payment	Net Cash	Total Valuation (HK$)	Value per Share (HK$)
Bear	10x	20x	0.9x	20x	-	1,438,062	164
Base	13.5x	30x	1.2x	40x	-	2,017,984	230
Bull	15x	35x	1.4x	45x	-	2,304,442	263

Key Risks

Intensifying competition in mobile gaming and payment
Growth rate volatility in mobile games and advertising
Deceleration in ARPU and MAU growth
Rising content acquisition costs
Margin pressure from increased infrastructure investments
Regulatory risks in mobile payment and internet finance

Shareholding Structure

Shareholder	% of Total Shares
Naspers LTD	33.3%
Ma Hua Teng	8.7%
Blackrock	1.8%
No. of Shares Outstanding (mn)	9,477
Free Float	5,465

Market Performance

700.HK: -1.7% in 1m, +10.0% in 6m, +25.8% in 12m
HSI: -3.5% in 1m, +5.8% in 6m, +0.5% in 12m

Strategic Expansion

Global Acquisitions: Tencent has made significant investments in global gaming companies such as Supercell, Activision Blizzard, and Riot Games, aiming to solidify its position as the world's largest game company.
Gaming Strategy: Focus on acquiring top game IPs and forming strategic alliances for international expansion. The company is also looking to expand into VR/AR gaming markets.

Conclusion

Tencent is well positioned to capitalize on key global internet trends, with a strong focus on gaming, advertising, and payment. Despite near-term margin pressures, its long-term growth prospects remain robust. The company is expected to deliver strong earnings growth and is currently undervalued compared to its peers. The target price of HK$230 reflects the company's solid fundamentals and growth potential.

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