Excerpts from OCBC Investment Research report

Tencent Holdings (HKG: 0700)

Weak revenue trends but outlook is turning positive Cost discipline helped margins and EPS beat Meituan shares distribution a reward for shareholders Advertising and financial services businesses to drive growth going forward; FV of HKD428

Tencent Holdings investment thesis

Tencent Holdings 3Q22 revenue trends were still relatively weak but there are glimpses of light at the end of the tunnel, with management citing advertising demand turning positive. Cost control efforts helped a significant beat at the bottom-line, with the company scaling back on loss-making activities in search of profitability. Tencent also delivered further positive news this quarter, announcing the distribution in specie of 90% of its stake in Meituan shares to shareholders. All in all, this turned out to be a relatively positive earnings season for Tencent. Over the long-term, we expect advertising and financial services business to...