Tencent's Gross Margin Likely Continued to Grow in 1Q -- Market Talk

Dow Jones04-15

0615 GMT - Tencent's gross margin likely continued to grow in 1Q thanks to an increased share of revenue from its higher-margin businesses, such as video account advertising, Nomura analysts Jialong Shi and Rachel Guo say in a research note. Tencent could report 33% on-year growth in non-GAAP net profit in 1Q, but weakness in its gaming segment could weigh on revenue, keeping growth muted at 6% on year, they say. Tencent's 1Q gross margin likely improved 3 percentage points to 49%, they say. Gaming might pick up in 2Q, with major companies due to release new titles. Nomura thinks Tencent will raise marketing spend as it launches new titles to boost success rates. It keeps a buy call on Tencent with a HK$400.00 target. Shares last at HK$305.80. (sherry.qin@wsj.com)

(END) Dow Jones Newswires

April 15, 2024 02:16 ET (06:16 GMT)

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Gaming might pick up in 2Q, with major companies due to release new titles. Nomura thinks Tencent will raise marketing spend as it launches new titles to boost success rates. It keeps a buy call on Tencent with a HK$400.00 target. Shares last at HK$305.80. 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Tencent could report 33% on-year growth in non-GAAP net profit in 1Q, but weakness in its gaming segment could weigh on revenue, keeping growth muted at 6% on year, they say. Tencent's 1Q gross margin likely improved 3 percentage points to 49%, they say. Gaming might pick up in 2Q, with major companies due to release new titles. Nomura thinks Tencent will raise marketing spend as it launches new titles to boost success rates. It keeps a buy call on Tencent with a HK$400.00 target. Shares last at HK$305.80. 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Tencent could report 33% on-year growth in non-GAAP net profit in 1Q, but weakness in its gaming segment could weigh on revenue, keeping growth muted at 6% on year, they say. Tencent's 1Q gross margin likely improved 3 percentage points to 49%, they say. Gaming might pick up in 2Q, with major companies due to release new titles. Nomura thinks Tencent will raise marketing spend as it launches new titles to boost success rates. It keeps a buy call on Tencent with a HK$400.00 target. Shares last at HK$305.80. 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