[20081114]Software & Services : Tencent Holdings (700.HK): BUY - "S Tencent, Software, quarter, revenue, change

yangruoxin

Key Points:
◆     Another Strong quarter, mainly driven by gaming. 3Q revenue reach Rmb2,024mn, representing QoQ growth of 26.5%. Net profit grew 14.5% QoQ to Rmb737mn, or fully diluted EPS of Rmb0.40, beating consensus by 8%.
◆     Competition Landscape: no change so far. Tencent remains far ahead of its competitors in IM and SNS.
◆     Strong Outlook for 4Q and 2009. IVAS will remain the main driver, with rapid expansion of the user base and better monetization on the back of new products.
◆     Huge share buy back plan of up to US$100mn before the next AGM (May 2009).  
◆     Our 2008 revenue forecast is Rmb7,171mn, EPS HK$1.72. Our 2009 revenue forecast is Rmb9,387mn, EPS HK$2.24. The stock is currently trading at the low end of its P/E range.
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