Tencent Offers Attractive Risk/Reward Profile, Haitong's Leung Says

The transcript discusses the current business slowdown, particularly in gaming and advertising, but notes that the situation is better than expected. It highlights the challenges in the gaming sector due to regulatory issues and the potential lifting of the gaming ban. The analysis covers Tencent's revenue structure, advertising strategies amidst macro headwinds, and valuation metrics, emphasizing the risk-reward profile of Tencent's stock.

What was the general sentiment about Tencent's performance despite the slowdown in various sectors?

• Significantly improved

• Worse than expected

• Better than feared

• Unchanged

What is the main concern regarding Tencent's gaming sector?

• Uncertainty in the gaming approval process

• High competition from other companies

• Lack of new game development

• Decreasing interest in gaming

What structural change is being considered for Tencent's business model?

• Reducing advertising efforts

• Diversifying away from games

• Increasing focus on gaming

• Expanding into new markets

What is a key factor in Tencent's potential advertising growth?

• Increasing ad prices

• High ad load on WeChat

• Low ad load compared to competitors

• Decreasing user base

What discount rate is used in Tencent's DCF valuation?

• 8%

• 10%

• 12%

• 11%