高盛对腾讯的研究分析报告

April8,2010TencentHoldings(0700.HK)GoldmanSachsGlobalInvestmentResearch1April8,2010COMPANYUPDATETencentHoldings(0700.HK)NeutralGrowthbeyondgamesWhat'schangedWeestimategames(includingsocialgames)nowaccountforabout50%ofTencent’srevenue.Thecompanytradesatsubstantialpremiums(30X2010EEPSversus8X-12X)topuregamecompanies,partlybecauseofTencent’s“platformadvantage”.RecentreleasessuchasAVAsuggestthisadvantagereducesmarketingcosts,butdoesnotguaranteenewhits.Tencent’s$37bnmarketcapmeansanysingleeventhasdifficultymovingthestock;investorsvaluethemostsuccessfulgamesinChinaatabout$1.8bn,soamega-hitgametypicallyaddsatmost5%toTencent’svalue.Implications(1)Weforecastrevenuegrowthslowingfrom74%in2009to52%in2010Eand30%in2011E.WeestimateTencentcapturing10%revenuemarketshareinsearchcouldadd5%toour2011Erevenueestimate,andTencentreleasingahitgamewith1mnpeakusers(or2-3hitgamescumulatingto1mn)mayadd5%.ConverselyQzonechurn,duetoconsumersnolongerplayingQQFarm,couldsubtract10%fromour2011Erevenue,andSMSsubscriptionchurnbecauseofupgradingtosmartphonesmaysubtract4%.Thedisplayadvertisingmarketistoofragmentedtomateriallyboostourestimates,andweseepaymentsandcommerceasimmaterialtorevenuein2010E-2011E.(2)Weviewstrategicprioritiesas:cementingQzonesubscriptionswithnon-gameactivities;nurturingreal-namesocialnetworks;transitioningmobileVAStoafree-miummodel;buildingsearchqueryshare;integratingmobileanddesktopgames;broadeningthegameportfoliobygenre;securingkeygamelicenses;andinternationalexpansion.ValuationOur12monthtargetpriceisHK$180persharebasedon36Xour2010Eearnings,against2010E-13EearningsCAGRof31%,2010EROEof50%.KeyrisksNewproductcontributions;slowinggamegrowth;QQFarmfaddishness.INVESTMENTLISTMEMBERSHIPNeutralCoverageView:NeutralChina:InternetGrowthReturns*MultipleVolatilityVolatilityMultipleReturns*GrowthInvestmentProfileLowHighPercentile20th40th60th80th100th*Returns=ReturnonCapitalForacompletedescriptionoftheinvestmentprofilemeasurespleaserefertothedisclosuresectionofthisdocument.TencentHoldings(0700.HK)AsiaPacificMediaandEntertainmentPeerGroupAverageKeydataCurrentPrice(HK$)156.0012monthpricetarget(HK$)180.00Marketcap(HK$mn/US$mn)286,129.0/36,862.1Foreignownership(%)--12/0912/10E12/11E12/12EEPS(HK$)3.055.256.748.56EPSgrowth(%)59.971.628.427.0EPS(diluted)(Rmb)2.974.605.907.49EPS(basicpre-ex)(Rmb)3.034.666.057.68P/E(X)51.029.723.118.2P/B(X)20.312.58.46.0EV/EBITDA(X)21.122.115.711.3Dividendyield(%)0.30.50.60.8ROE(%)53.150.142.838.0Priceperformancechart6080100120140160180Apr-09Jul-09Oct-09Jan-1040455055606570TencentHoldings(L)MSCIChina(R)Sharepriceperformance(%)3month6month12monthAbsolute(5.8)23.2148.2Rel.toMSCIChina(6.1)13.564.4Source:Companydata,GoldmanSachsResearchestimates,FactSet.Priceasof4/07/2010close.JamesMitchell,CFA(212)357-1849|[e-mail]&Co.KathyChen+852-2978-1291|[e-mail](Asia)L.L.C.MichelleSun+852-2978-2679|[e-mail](Asia)L.L.C.TheGoldmanSachsGroup,Inc.doesandseekstodobusinesswithcompaniescoveredinitsresearchreports.Asaresult,investorsshouldbeawarethatthefirmmayhaveaconflictofinterestthatcouldaffecttheobjectivityofthisreport.Investorsshouldconsiderthisreportasonlyasinglefactorinmakingtheirinvestmentdecision.ForRegACcertification,seetheendofthetext.OtherimportantdisclosuresfollowtheRegACcertification,orgoto(0700.HK)GoldmanSachsGlobalInvestmentResearch2TencentHoldings:SummaryfinancialsProfitmodel(Rmbmn)12/0912/10E12/11E12/12EBalancesheet(Rmbmn)12/0912/10E12/11E12/12ETotalrevenue12,440.018,853.824,553.031,514.6Cash&equivalents6,243.714,530.525,126.338,829.2Costofgoodssold(3,889.5)(5,721.0)(7,080.9)(8,841.6)Accountsreceivable1,603.12,429.63,164.04,061.1SG&A(2,286.7)(3,419.0)(4,423.1)(5,864.6)Inventory0.00.00.00.0R&D--------Othercurrentassets5,310.25,310.25,310.25,310.2Otheroperatingprofit/(expense)(17.0)0.00.00.0Totalcurrentassets13,156.922,270.233,600.548,200.5EBITDA6,672.510,395.014,139.018,552.3NetPP&E2,517.23,532.84,407.15,184.3Depreciation&amortization(425.8)(681.2)(1,090.0)(1,744.0)Netintangibles268.7268.7268.7268.7EBIT6,246.79,713.813,049.016,808.3Totalinvestments233.8233.8233.8233.8Interestincome94.8171.0376.3536.0Otherlong-termassets510.1209.1209.1209.1Interestexpense0.00.00.00.0Totalassets17,505.827,576.539,722.955,100.1Income/(loss)fromuncons.subs.22.20.00.00.0Others0.00.00.00.0Accountspayable2,322.63,355.64,348.55,567.5Pretaxprofits6,363.89,884.813,425.317,344.3Short-termdebt0.00.00.00.0Incometax(819.1)(1,315.5)(2,210.9)(3,042.6)Othercurrentliabilities2,038.23,291.24,442.75,842.3Minorities(66.0)(58.1)(58.1)0.0Totalcurrentliabilities4,563.16,849.18,993.511,612.1Long-termdebt0.00.00.00.0Netincomepre-preferreddividends5,478.78,511.111,156.314,301.7Otherlong-termliabilities644.0644.0644.0644.0Preferreddividends0.00.00.00.0Totallong-termliabilities644.0644.0644.0644.0