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<Research>BofAS: TENCENT's Annual Buyback May Top $130B, Beating Forecast
Recommend 26 Positive 36 Negative 18 |
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BofA Securities released a report after meeting with TENCENT (00700.HK) management and U.S. investors. It learned that TENCENT has strong willingness, capability and execution on shareholder return, and that the company plans to buy back this year with $100 billion. TENCENT sped up its buyback pace to $1 billion/day in January; if BofA Securities assumed such pace is continued, the annual buyback could be over $130 billion. Together with the dividends declared last year, it was estimated that shareholders will receive a return of more than 5% this year. On the other hand, the size of TENCENT's buybacks already exceled the size of its shareholder Prosus' stake reduction. Assuming that Prosus' stake reduction progress in 2-4Q24 is similar to that of 1Q24, it was projected that TENCENT's buybacks may be around 2x (or more) Prosus' stake cut. TENCENT's strategic goal is to improve its game revenues, and it is not driven solely by new games. The release of the DnF Mobile came earlier than market forecast, reflecting the company's confidence. On the advertising front, BofA Securities believed that TENCENT's advertising performance will continue to outperform other large platforms in China this year, and that efforts such as upgrading the advertising platform infrastructure will juice persisted revenue growth looking ahead. BofA Securities maintained a Buy rating on TENCENT, with a target price of $410. AAStocks Financial News |
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