研究报告全文：MN17Feb2023CMBInternationalGlobalMarketsEquityResearchCompanyUpdateTencent700HKWhatnexttolookforwardtoTargetPriceHK45000WeexpectTencents4Q22EresultstobelargelyinlinewithourpreviousPreviousTPHK38160forecastsexceptslightlysevereimpactonadandFBSbusinessesfromUpDownside176opening-upinDec2022WeslightlyadjustFY224Q22EtotalrevenueforecastCurrentPriceHK38260downby13butremainpositiveontherevenuerecoverytrajectoryinFY2324EduetoconsumptionrecoverywhichshouldbenefitTencentsChinaInternetconsumerinternetbusinessincrementalcontributionfromVideoAccountSaiyiHECFAmonetizationandqualitygamespipelineWeraiseFY2324Enon-IFRSnet85239161739incomeforecastby12reflectingimprovedoutlookofhigh-margingaminghesaiyicmbicomhkandadbusinesseswhichshouldleadtobetterGPMinFY23FY24EWenowforecastnon-IFRSnetincometogrowby1614YoYinFY2324EOurSOTP-WentaoLUluwentaocmbicomhkderivedtargetpriceisHK4500previousHK3816whichtranslatesinto2825xFY2324Enon-IFRSPEWeexpectenterpriseservicesrelatedbusinessYeTAOdevelopmentwillbenextstagevaluationdriversMaintainBUYfranktaocmbicomhkMarketlooksbeyond4Q22forvaluationsupportFor4Q22EweStockDataforecasttotalrevenuetodeclineby1YoYtoRMB1424bn3Q22-2MktCapHKmn36502910YoYbutnon-IFRSnetincometoincreaseby21YoYtoRMB302bnAvg3mthstoHKmn33303Q222YoYonimprovedoperatingefficiencyandeasybaseGaming52wHighLowHK4549419072businessfacedpressurein4Q22EandweestimatedomesticinternationalTotalIssuedSharesmn95408SourceFactSetgamerevenuetodeclineby57YoYbutweexpectonlinegamesbusinesswillrecovermodestlyin2023WeforecastadrevenuewillreturnShareholdingStructuretopositiveYoYgrowth4YoYin4Q22EsupportedbytheadMIHTC287AdvanceDataServicesLimited84monetizationofVideoAccountwhichweexpecttocontributeoverRMB1bnSourceHKExrevenuein4Q22WeexpectFintechandBusinessservicesrevenuetobeflatYoYin4Q22butbothshouldbeongradualrecoveryin2023withofflineSharePerformanceactivitiesandconsumptionrecoveryaswellasbusinessservicesstrivetoAbsoluteRelative1-mth3371improveitsqualitylong-termgrowthpotential3-mth368190EnhancedcompetitivestrengthinconsumerinternetWeforecasttotal6-mth329256revenueandnon-IFRSnetincometogrowby118YoYand1614YoYSourceFactSetinFY2324Esupportedby1stronggamepipelinewithUndawnValorant12-mthPricePerformanceandPokemenUnitedetclinedupforlaunchin2023E2solidadrevenuereboundwithcompetitiveedgetotakeover-monetizedcompetitorsmarketshare3enhancingoperatingefficiencyMaintainBUYOurSOTP-derivedTPisHK4500whichcomprisesofHK18183063121025235forgamingSNSadfintechcloudbusinessandHK147657fornetcashstrategicinvestmentTencentcurrentlytradesat21x2024Enon-IFRSPEor17x2024EPEifexcludingstrategicSourceFactSetinvestmentandnetcashCurrentvaluationjustifiedbyitsenhancedbusinessoutlookandstrongearningsgrowthFY22-24ECAGR15EarningsSummaryYE31DecFY20AFY21AFY22EFY23EFY24ERevenueRMBmn482064560118551995611483661991YoYgrowth2781621510883Grossmargin460439430431434NetprofitRMBmn15984702248220105173013530031526275YoYgrowth713406532286128AdjustednetprofitRMBmn12274201237880116152913411221526716YoYgrowth3010962155138EPSAdjustedRMB12931299121714051599ConsensusEPSRMB12931299120714571710PSx6657585248PEx232181303235209ROE281298123140139SourceCompanydataBloombergCMBIGMestimatesPLEASEREADTHEANALYSTCERTIFICATIONANDIMPORTANTDISCLOSURESONLASTPAGE1MOREREPORTSFROMBLOOMBERGRESPCMBRGOORhttpwwwcmbicomhk17Feb2023BusinessandvaluationupdateWeslightlylowerFY224Q22Etotalrevenueforecastby13asthesurgeinCOVIDcasesinDec2022sloweddowntherecoveryofadandfintechbusinessesin4Q22EButweexpectmarketnowlooksforincrementalsustainabledevelopmentin2023forvaluationsupportWeremainpositiveontherecoverytrendinFY23FY24EgiventhestrongonlineandofflineconsumptionrecoverypostChinasreopeningThuswemaintainFY2324EtotalrevenueforecastlargelyunchangedWeraiseFY2324Enon-IFRSnetincomeforecastby12toRMB13411527bnmainlyduetothesolidrecoveryofhigh-margingamingandadbusinesswhichshouldleadtobetterGPMinFY23FY24EFigure1TencentforecastrevisionCurrentPreviousChangeRMBbnFY22EFY23EFY24EFY22EFY23EFY24EFY22EFY23EFY24ERevenue552061156620555861196626-07-01-01GrossProfit237426372873238626252855-050506Adjustednetprofit116213411527116513291499-030918AdjustedEPSRMB120139158120137155001118GrossMargin43043143442942943101ppt02ppt03pptAdjustednetmargin21021923121021722600ppt02ppt05pptSourceCMBIGMestimatesFigure2CMBIGMestimatesvsconsensusCMBIGMConsensusDiffRMBbnFY22EFY23EFY24EFY22EFY23EFY24EFY22EFY23EFY24ERevenue552061156620554561646913-04-08-42GrossProfit237426372873238727333092-05-35-71Adjustednetprofit116213411527117614371686-12-67-94AdjustedEPSRMB120139158121146171-06-49-78GrossMargin43043143443044344700ppt-12ppt-13pptAdjustednetmargin210219231212233244-02ppt-14ppt-13pptSourceBloombergCMBIGMestimatesFor4Q22Eweforecasttotalrevenuetodeclineby1YoYbutgrowby2QoQtoRMB1424bn3Q22-2YoYandnon-IFRSnetincometoincreaseby21YoYtoRMB302bn3Q222YoYprimarilyduetoimprovedoperatingefficiencyandaneasycompbaseGamingbusinessfacedpressurein4Q22Eandweestimatedomesticinternationalgamerevenuetodeclineby57YoYmainlyduetolimitednewgameslaunchedinthedomesticmarketandthehighbasefacedbyinternationalgamebusinessWeforecastadrevenuewillreturntopositiveYoYgrowth4YoYin4Q22EsupportedbytheadmonetizationofVideoAccountwhichweexpecttocontributeoverRMB1bnrevenuein4Q22WeexpectFintechandBusinessservicesrevenuetobeflatYoYin4Q22astheCOVID-19impactedofflinepaymenttransactionsandthestrategicadjustmentofTencentCloudremainsongoingFigure3TencentkeyfinancialforecastsRMBbn20212022E2023E2024E4Q22ESNSrevenue1173117312431299291YoY8500604500Gamesrevenue1743169118261938401YoY11730806162Onlineadrevenue8878049221025224YoY789314611140FBSrevenue1722178020512286482YoY3443415211404Totalrevenue56015520611566201424YoY162151088312Grossprofitmargin439430431434425PLEASEREADTHEANALYSTCERTIFICATIONANDIMPORTANTDISCLOSURESONLASTPAGE217Feb2023RMBbn20212022E2023E2024E4Q22EGAexpensesasoftotalrevenue160192182175187SMexpensesasoftotalrevenue7257585659Non-IFRSnetprofitmargin221210219231212Non-IFRSnetprofit1238116213411527302YoY0962155138214SourceCompanydataCMBIGMestimatesWenowmodelgamesSNSadFBSbusinesstocontribute293196155345oftotalrevenuein2024Eversus311209158307in2021Figure4Tencentrevenuemix100908070605040302010020182019202020212022E2023E2024EOthersFintechandbusinessservicesOnlineAdvertisingSNSGamesSourceCompanydataCMBIGMestimatesGames306of2022ErevenueChinasgamelicenseapprovalhasbeennormalizingSinceNov2022TencentsseveralhighlyanticipatedtitlesincludingUndawnValorantPokemonUnitedMetalSlugAwakeningandSYNCEDoffplanethavebeenapprovedandarelikelytobelaunchedin2023EsupportingTencentsdomesticrevenuegrowthWenowestimatedomesticgamerevenuetogrowby75YoYtoRMB13171383bninFY23FY24EWeforecastinternationalgamestoreboundby129YoYinFY2324EFigure5TencentdomesticgamesrevenueFigure6TencentinternationalgamesrevenueRMBbnRMBbn1408603513565030413025402125203001512020-210115-4105110-600202020212022E2023E2024E202020212022E2023E2024EDomesticgamesrevenueInternationalgamesrevenueYoYRHLYoYRHLSourceCompanydataCMBIGMestimatesSourceCompanydataCMBIGMestimatesPLEASEREADTHEANALYSTCERTIFICATIONANDIMPORTANTDISCLOSURESONLASTPAGE317Feb2023Figure7TencentgamespipelineTitleGenreDeveloperLaunchtimeApprovedUndawnSurvivalSelf-developed2023EYesValorantFPSSelf-developed2023EYesPokemonUnitedMobaSelf-developed2023EYesMetalSlugAwakeningActionSelf-developed2023EYesSYNCEDoffplanetFPSSelf-developed2023EYesAlchemyStarsAnimeSelf-developed2023EYesDontStarveNewhomeSurvivalLicensed2023EYesLostArkMMORPGLicensed2023EYesUnchartedWatersSLGLicensed2023EYesTheDivision2FPSLicensed2023EYesRocoKingdomSandboxSelf-developedTBDNoHonorofKingsWorldRPGSelf-developedTBDNoHonorofKingsDawnActionSelf-developedTBDNoOurPlanetSandboxLicensedTBDNoSourceCompanydataCMBIGMestimatesOnlineadvertising146of2022ErevenueWeforecastonlineadrevenuetoincreaseby1511YoYtoRMB9221025bninFY23FY24EdrivenbyrecoveryofoveralladmarketdemandandtheacceleratedmonetizationofvideoaccountWemodelVideoAccounttogenerateadrevenueofRMB127274bninFY2324Eaccountingfor1427ofTencentonlineadrevenueinFY2324EFigure8TencentonlineadrevenueFigure9TencentonlineadrevenuequarterlyRMBbnRMBbn12025304020301002515208020101060515004010-5-1020-105-200-152019202020212022E2023E2024E0-301Q202Q203Q204Q201Q212Q213Q214Q211Q222Q223Q22OnlineadrevenueYoYRHL4Q22EOnlineadrevenueYoYRHLSourceCompanydataCMBIGMestimatesSourceCompanydataCMBIGMestimatesTencentsadbusinessfacedpressurein2022asseveralkeyverticalssuchaspropertyandeducationwhichaccountedfor13oftotaladsonTencentin2021perAppGrowingsignificantlycuttheiradbudgetin2022duetotighteningpolicyAsTencentsadbusinessfullydigestedthenegativeimpactin2022willhaveeasierbasein2023EItsgradualmonetizationprocessofitsecosystemwillleaveroomforgradualbutrelativelymorelong-lastinggrowthpotentialinthehighlycompetitiveonlineadvertisingindustryinChinamarketPLEASEREADTHEANALYSTCERTIFICATIONANDIMPORTANTDISCLOSURESONLASTPAGE417Feb2023Figure10Tencentofadsbreakdownbytopverticals18161412108642020212022SourceAppGrowingCMBIGMFintechandbusinessservice322of2022ErevenueWeforecastFBSrevenuetoreboundby1511YoYtoRMB205229bninFY23FY24mainlydrivenbytherecoveryofofflinepaymenttransactionsandthereaccelerationincloudrevenuegrowthForfintechbusinessthepositivesignsduring2023CNYindicatesapotentialstrongconsumptionandpaymentrecoverythroughout2023AccordingtoWeixintotalvolumeofofflinecommercialpaymenttransactionswasupby23YoYin2023CNYThenumberofordersincateringretailverticalsgrewby4032YoYrespectivelyin2023CNYSupportedbytherecoveryofofflinepaymentweestimatefintechrevenuetogrowby1612YoYinFY2324EFigure11TencentFBSrevenueFigure12TencentFBSrevenuequarterlyRMBbnRMBbn25040605035452005030404035150253020302520100152015101050105500002019202020212022E2023E2024E2Q203Q204Q201Q212Q213Q214Q211Q222Q223Q22Fintechandothersrevenue1Q20CloudrevenueFBSrevenueYoYrhs4Q22EGrowthrhsSourceCompanydataCMBIGMSourceCompanydataCMBIGMForthecloudbusinesswearenotconcernedaboutTencentCloudslosingmarketshareintheshorttermasithasbeenproactivelyadjustingstrategyscalingbackloss-makingprojectordersandenhancingoperatingefficiencysincethebeginningof2022WeexpectitsAIcloudrevenuewillreturntopositivegrowthtrackin2023EOn2022TencentDigitalEcosystemSummitTencentemphasizesitsproduct-firststrategytogrowitscloudbusinessSupportedbyitsfocusedstrategyandstrongproductdevelopmentcapabilitiesTencentiswell-positionedtocapturetheenormousdevelopingopportunitiesinChinasSaaSmarketChinaSaaSmarketremainsatearlydevelopmentstagewithamplegrowthpotentialwhichonlyaccountedfor17oftotalcloudspendinginChinavsSaaSaccountingfor46ofglobalcloudspendingPLEASEREADTHEANALYSTCERTIFICATIONANDIMPORTANTDISCLOSURESONLASTPAGE517Feb2023Figure13CloudspendingbreakdownChinavsUS20211009080706050403020100GlobalChinaIaaSPaaSSaaSSourceCAICTCMBIGMFigure14Tencentproduct-firststrategySourceTencentDigitalEcosystemSummitCMBIGMOperatingefficiencyandmarginsensitivityanalysisTencentsexpensecontrolandefficiencyimprovementinitiativesshallfurtherunleashoperatingleveragein2023EWeestimateoperatingexpensestorevenueratiotodropfrom249in2022Eto240231in20232024EThiswillsupportnon-IFRSnetmargintoimprovefrom210in2022Eto219231in20232024EFigure15TencentexpensestrendFigure16Tencentmargintrend25504520403515302510201551050020182019202020212022E2023E2024E20182019202020212022E2023E2024ESMexpensesratioGAexpensesratioGPMNon-IFRSnetmarginSourceCompanydataCMBIGMestimatesSourceCompanydataCMBIGMestimatesPLEASEREADTHEANALYSTCERTIFICATIONANDIMPORTANTDISCLOSURESONLASTPAGE617Feb2023SOTPvaluationOurSOTP-derivedtargetpriceofHK4500comprisespershare1HK1818fortheonlinegamesbusinessbasedona20x2023EPEwhichisatdiscounttoaveragePEforitsglobalgamingpeers22xThediscountreflectsTencentsgamingbusinesshasenteredmaturestagewithmorestablegrowthoutlookversuspeers2HK306fortheSNSbusinessincludingthemarketcapofTencentsstakeinitssubsidiariesthevaluationofTencentVideobasedona30x2023EPSatapremiumtothe27xaveragePSofitspeersgivenitscontentandusertrafficleadershipandthevaluationofothermembershipservicesbasedona20x2023EPS3HK312fortheadvertisingbusinessbasedona18x2023EPEatapremiumtotheindustryaverage17xgivenTencentsstrongecosystemthatcouldoffersubstantialadmonetizationpotentialinthelongterm4HK1025forthefintechbusinessbasedona50x2023EPSatapremiumtothepeeraverage26xThismainlyreflectedourpositiveviewontherecoveryofChinasdigitalpaymentvolumeinFY2324EandTencentasoneofthelargestdigitalpaymentplatformsinChinaiswellpositionedtobenefitfromtherecovery5HK235forthecloudbusinessbasedona50x2023EPSatapremiumtotheindustryaverage42xasweexpectTencenttograduallygainmarketshareandbenefitfromthegrowthofChinaSaaSmarketafteritsstrategicadjustment6HK657forstrategicinvestmentsbasedonthecurrentmarketvalueofTencentslistedinvestmentandthebookvalueofitsunlistedinvestmentWeapplieda30holdingcompanydiscounttothefairvalueofTencentsequityinvestment7HK147fornetcashFigure17TencentSOTPvaluation2023Enet2023E2023E2023EMarketcapValuationAsofPershareprofitrevenuePExPSxRMBmntoTencenttotalvaluationRMBmnRMBmnRMBmnvaluationHKOnlinegames7392620x14785244041818SocialnetworkservicesSNS12430824851368306TencentMusicTME98871544781567ChinaLiterature32865194500524Huya836139630105Onlinevideosubscription2730030x8190022101Others4436120x8872224109Onlineadvertising1410918x25395769312Fintech16683150x8341532281025Cloudbusinessservices3826750x19133752235Netcash11963333147Valuationofcorebusiness3126117RMBHK086ValuationofcorebusinessHKmn3666570ValuationpersharecorebusinessHK3843ValuationpershareinvestmentHK657146ValuationpershareTencentHK4500SourceCompanydataCMBIGMestimatesPLEASEREADTHEANALYSTCERTIFICATIONANDIMPORTANTDISCLOSURESONLASTPAGE717Feb2023Figure18PeercomparisononlinegamesandadvertisingsectorPriceEPSgrowthYoYPExCompaniesTickerLocalFY22EFY23EFY24EFY22EFY23EFY24EOnlinegamesNetEaseNTESUS86431111171715ActivisionBlizzardATVIUS77720267262019ElectronicArtsEAUS113327136161918TakeTwoInteractiveTTWOUS1160183355243523IGG799HK28nana142na4418iDreamSky1119HK40nana130na2511Nexon3659JP3075015115242421Nintendo7974JP54980419151517BandaiNamco7832JP8665061281241919PerfectWorld002624CH14686161618151337Interactive002555CH22391612171413AveragePE202217OnlineadvertisingFocusMedia002027CH68496023312016BaiduBIDUUS152012842181712MetaMetaUS177227721161513GoogleGOOGUS971111020191714AveragePE211714SourceCompanydataCMBIGMestimatesNotedataasofthemarketcloseon15FeballdataarebasedonBloombergconsensusestimatesFigure19PeercomparisononlinevideofintechandcloudsectorsPriceRevenuegrowthYoYPSxCompaniesTickerLocalFY22EFY23EFY24EFY22EFY23EFY24EOnlinevideoiQiyiIQUS751157467171615MangoExcellentMedia300413CH349178156127463935AveragePS312725CloudMicrosoftMSFTUS269358111118968677GoogleGOOGUS971173128111534742SalesforceCRMUS1711170103123555045KingsoftCloudKCUS441208474090808AmazonAMZNUS10120791126201917AveragePS474238FintechPayPalPYPLUS779876699323027SquareSQUS82706137159282521AveragePS302724SourceCompanydataCMBIGMestimatesNotedataasofthemarketcloseon15FeballdataarebasedonBloombergconsensusestimatesOurcalculationforthevaluationofTencentsstrategicinvestmentsisbasedonthecurrentmarketvalueofTencentslistedinvestmentandthebookvalueofitsunlistedinvestmentWeapplieda30holdingcompanydiscounttothefairvalueofTencentsequityinvestmentPLEASEREADTHEANALYSTCERTIFICATIONANDIMPORTANTDISCLOSURESONLASTPAGE817Feb2023Figure20TencentvaluationofstrategicinvestmentNameTickerTencentsstakeMktcapUSmnValuetoTencentHKbnPDDHoldingsIncPDDUS155119434144302SeaLtdSEUS2023696858247KuaishouTechnology1024HK2063409154884Meituan3690HK3611693033016SnapIncSNAPUS1751780624347KEHoldingsInc772HK1132430221419ChinaInternationalCapitalCoBEKEUS1142117118759JDcomInc3908HK278557117754SpotifyTechnologySA9618HK862479416651NUHoldingsLtdCaymanIslandsFUTUUS792450415119FutuHoldingsLtdSPOTUS216774313051BilibiliIncNUUS13495159953TongchengTravelHoldingsLtd9626HK21449928324VipshopHoldingsLtd780HK11589098005KanzhunLtdBZUS99102597898KraftonIncVIPSUS13568427199WarnerMusicGroupCorp259960KS49179246878NetmarbleCorpWMGUS17541155624YixinGroupLtd251270KS5399233877ZhongAnOnlinePCInsuranceC2858HK8140922582WaterdropInc6060HK26511962472KadokawaCorpWDHUS6928621532MaoyanEntertainment9857HK13713561453ParadoxInteractiveAB9959HK9120401449TuyaInc9468JP11715401403LinklogisInc1896HK15611271373OxfordNanoporeTechnologiesPPDXSS7722421338LinmonMediaLtd2391HK1908271222DHCSoftwareCoLtdONTLN4931111189UbisoftEntertainmentSAUBIFP5526931147ZhihuInc002065CH12611401120Otherlistedentitiesasawhole5779210294ListedinvestmentCurrentvalue503883UnlistedinvestmentBookValue391721Totalinvestmentvalue895604Holdcodiscount30Valuationofstrategicinvestment649987Valuationofstrategicinvestmentpershare657SourceBloombergCompanydataCMBIGMestimatesNotedataasofthemarketcloseon15FebPLEASEREADTHEANALYSTCERTIFICATIONANDIMPORTANTDISCLOSURESONLASTPAGE917Feb2023FinancialSummaryINCOMESTATEMENT2019A2020A2021A2022E2023E2024EYE31DecRMBmnRevenue377289482064560118551995611483661991Costofgoodssold209756260532314174314617347792374741Grossprofit167533221532245944237377263691287250Operatingexpenses488393729525676874609410499064Sellingexpense213963375840594314643546637071Adminexpense534466762589847105983111290115848Others2600364088156117499875265153856Operatingprofit118694184237271620149918169586188186ShareoflossesprofitsofassociatesJV16813672164441628632571303Interestincome631469576650813695459457Interestexpense761378877114779763536419Pre-taxprofit109400180022248062125835159977180464Incometax135121989720252201342399727070Aftertaxprofit95888160125227810105701135980153394Minorityinterest25782782988529680767Netprofit93310159847224822105173135300152628Adjustednetprofit94351122742123788116153134112152672Grossdividends98801265312704683487929918BALANCESHEET2019A2020A2021A2022E2023E2024EYE31DecRMBmnCurrentassets253968317647484812467511598630710764Cashequivalents132991152798167966268233335209450755Accountreceivables358394498149331450784843850866Inventories7188141063177418671920Prepayment278404032165390356637292241105STbankdeposits469116848783813102194124157150307FinancialassetsatFVTPL7114659310573111021165712240Othercurrentassets25553653106676346843803572Non-currentassets70001810157781127552116590712314071275580PPE468245984361914739808471293919Deferredincometax182092134826068192273094923372InvestmentinJVsassos221894305258323188338245353790369811Intangibles128860159437171376194460215579235900FinancialassetsatFVTPL128822165944192184192184192184192184Othernon-currentassets155409303948352822347810354193360394Totalassets95398613334251612364163341818300371986344Currentliabilities240156269079403098299143354671355241Short-termborrowings332291424219003168551863220076Accountpayables806909403010947095234128792110178Taxpayable97331213412506140731524516098Othercurrentliabilities113225144851256673167536186555203443Leaseliabilities327938225446544654465446Non-currentliabilities225006286303332573360820377432392747Long-termborrowings104257112145136936139423140182140411Bondpayables83327122057145590156509162378165423Deferredincome733466784526125851391214990Othernon-currentliabilities300884542345521523046096071924Totalliabilities465162555382735671659963732102747988Retainedearnings3846515384646699117661448899441029598Otherreserves48055165520136388136388136388136388Totalshareholdersequity43270670398480629990253210263321165986Minorityinterest561187405970394709237160272369Totalequityandliabilities95398613334251612364163341818300371986344PLEASEREADTHEANALYSTCERTIFICATIONANDIMPORTANTDISCLOSURESONLASTPAGE1017Feb2023CASHFLOW2019A2020A2021A2022E2023E2024EYE31DecRMBmnOperatingProfitbeforetaxation109400180022248062125835159977180464Depreciationamortization415285077456818602306964778154Taxpaid135121989720252201342399727070Changeinworkingcapital15330274232844323471186627610Others415644203106598000Netcashfromoperations148590194119175186198278217492259159InvestingCapitalexpenditure323693390634931337363662438857Acquisitionofsubsidiariesinvestments68512108665117642213575708040569Netproceedsfromdisposalofshort-term16411153760000investmentsOthers317005476025976616446487368826Netcashfrominvesting116170181955178549116737158577148252FinancingNetborrowings229614449045239196071823416534Proceedsfromshareissues27217160000Others2156132559236198811017411895Netcashfromfinancing167213647216201872680614639NetchangeincashCashatthebeginningoftheyear97814132991152798167966268233335209Exchangedifference108560043089000Cashattheendoftheyear132991152798167966268233335209450755GROWTH2019A2020A2021A2022E2023E2024EYE31DecRevenue2072781621510883Grossprofit1793221103511189Operatingprofit216552474448131110Netprofit185713406532286128Adjnetprofit2183010962155138PROFITABILITY2019A2020A2021A2022E2023E2024EYE31DecGrossprofitmargin444460439430431434Operatingmargin315382485272277284Adjnetprofitmargin250255221210219231ReturnonequityROE247281298123140139GEARINGLIQUIDITYACTIVITIES2019A2020A2021A2022E2023E2024EYE31DecNetdebttoequityx020102000001Currentratiox111212161720Receivableturnoverdays347341321298289280Payableturnoverdays140413171272110513521073VALUATION2019A2020A2021A2022E2023E2024EYE31DecPE286232181303235209PEdiluted291236184307239212PB625350353127SourceCompanydataCMBIGMestimatesNoteThecalculationofnetcashincludesfinancialassetsPLEASEREADTHEANALYSTCERTIFICATIONANDIMPORTANTDISCLOSURESONLASTPAGE1117Feb2023DisclosuresDisclaimersAnalystCertificationTheresearchanalystwhoisprimaryresponsibleforthecontentofthisresearchreportinwholeorinpartcertifiesthatwithrespecttothesecuritiesorissuerthattheanalystcoveredinthisreport1alloftheviewsexpressedaccuratelyreflecthisorherpersonalviewsaboutthesubjectsecuritiesorissuerand2nopartofhisorhercompensationwasisorwillbedirectlyorindirectlyrelatedtothespecificviewsexpressedbythatanalystinthisreportBesidestheanalystconfirmsthatneithertheanalystnorhisherassociatesasdefinedinthecodeofconductissuedbyTheHongKongSecuritiesandFuturesCommission1havedealtinortradedinthestockscoveredinthisresearchreportwithin30calendardayspriortothedateofissueofthisreport2willdealinortradeinthestockscoveredinthisresearchreport3businessdaysafterthedateofissueofthisreport3serveasanofficerofanyoftheHongKonglistedcompaniescoveredinthisreportand4haveanyfinancialinterestsintheHongKonglistedcompaniescoveredinthisreportCMBIGMoritsaffiliateshaveinvestmentbankingrelationshipwiththeissuerscoveredinthisreportinpreceding12monthsCMBIGMRatingsBUYStockwithpotentialreturnofover15overnext12monthsHOLDStockwithpotentialreturnof15to-10overnext12monthsSELLStockwithpotentiallossofover10overnext12monthsNOTRATEDStockisnotratedbyCMBIGMOUTPERFORMIndustryexpectedtooutperformtherelevantbroadmarketbenchmarkovernext12monthsMARKET-PERFORMIndustryexpectedtoperformin-linewiththerelevantbroadmarketbenchmarkovernext12monthsUNDERPERFORMIndustryexpectedtounderperformtherelevantbroadmarketbenchmarkovernext12monthsCMBInternationalGlobalMarketsLimitedAddress45FChampionTower3GardenRoadHongKongTel85239000888Fax85239000800CMBInternationalGlobalMarketsLimitedCMBIGMisawhollyownedsubsidiaryofCMBInternationalCapitalCorporationLimitedawhollyownedsubsidiaryofChinaMerchantsBankImportantDisclosuresTherearerisksinvolvedintransactinginanysecuritiesTheinformationcontainedinthisreportmaynotbesuitableforthepurposesofallinvestorsCMBIGMdoesnotprovideindividuallytailoredinvestmentadviceThisreporthasbeenpreparedwithoutregardtotheindividualinvestmentobjectivesfinancialpositionorspecialrequirementsPastperformancehasnoindicationoffutureperformanceandactualeventsmaydiffermateriallyfromthatwhichiscontainedinthereportThevalueofandreturnsfromanyinvestmentsareuncertainandarenotguaranteedandmayfluctuateasaresultoftheirdependenceontheperformanceofunderlyingassetsorothervariablemarketfactorsCMBIGMrecommendsthatinvestorsshouldindependentlyevaluateparticularinvestmentsandstrategiesandencouragesinvestorstoconsultwithaprofessionalfinancialadvisorinordertomaketheirowninvestmentdecisionsThisreportoranyinformationcontainedhereinhavebeenpreparedbytheCMBIGMsolelyforthepurposeofsupplyinginformationtotheclientsofCMBIGMoritsaffiliatestowhomitisdistributedThisreportisnotandshouldnotbeconstruedasanofferorsolicitationtobuyorsellanysecurityoranyinterestinsecuritiesorenterintoanytransactionNeitherCMBIGMnoranyofitsaffiliatesshareholdersagentsconsultantsdirectorsofficersoremployeesshallbeliableforanylossdamageorexpensewhatsoeverwhetherdirectorconsequentialincurredinrelyingontheinformationcontainedinthisreportAnyonemakinguseoftheinformationcontainedinthisreportdoessoentirelyattheirownriskTheinformationandcontentscontainedinthisreportarebasedontheanalysesandinterpretationsofinformationbelievedtobepubliclyavailableandreliableCMBIGMhasexertedeveryeffortinitscapacitytoensurebutnottoguaranteetheiraccuracycompletenesstimelinessorcorrectnessCMBIGMprovidestheinformationadvicesandforecastsonanASISbasisTheinformationandcontentsaresubjecttochangewithoutnoticeCMBIGMmayissueotherpublicationshavinginformationandorconclusionsdifferentfromthisreportThesepublicationsreflectdifferentassumptionpoint-of-viewandanalyticalmethodswhencompilingCMBIGMmaymakeinvestmentdecisionsortakeproprietarypositionsthatareinconsistentwiththerecommendationsorviewsinthisreportCMBIGMmayhaveapositionmakemarketsoractasprincipalorengageintransactionsinsecuritiesofcompaniesreferredtointhisreportforitselfandoronbehalfofitsclientsfromtimetotimeInvestorsshouldassumethatCMBIGMdoesorseekstohaveinvestmentbankingorotherbusinessrelationshipswiththecompaniesinthisreportAsaresultrecipientsshouldbeawarethatCMBIGMmayhaveaconflictofinterestthatcouldaffecttheobjectivityofthisreportandCMBISwillnotassumeanyresponsibilityinrespectthereofThisreportisfortheuseofintendedrecipientsonlyandthispublicationmaynotbereproducedreprintedsoldredistributedorpublishedinwholeorinpartforanypurposewithoutpriorwrittenconsentofCMBIGMAdditionalinformationonrecommendedsecuritiesisavailableuponrequestForrecipientsofthisdocumentintheUnitedKingdomThisreporthasbeenprovidedonlytopersonsIfallingwithinArticle195oftheFinancialServicesandMarketsAct2000FinancialPromotionOrder2005asamendedfromtimetotimeTheOrderorIIarepersonsfallingwithinArticle492atodHighNetWorthCompaniesUnincorporatedAssociationsetcoftheOrderandmaynotbeprovidedtoanyotherpersonwithoutthepriorwrittenconsentofCMBIGMForrecipientsofthisdocumentintheUnitedStatesCMBIGMisnotaregisteredbroker-dealerintheUnitedStatesAsaresultCMBIGMisnotsubjecttoUSrulesregardingthepreparationofresearchreportsandtheindependenceofresearchanalystsTheresearchanalystwhoisprimaryresponsibleforthecontentofthisresearchreportisnotregisteredorqualifiedasaresearchanalystwiththeFinancialIndustryRegulatoryAuthorityFINRATheanalystisnotsubjecttoapplicablerestrictionsunderFINRARulesintendedtoensurethattheanalystisnotaffectedbypotentialconflictsofinterestthatcouldbearuponthereliabilityoftheresearchreportThisreportisintendedfordistributionintheUnitedStatessolelytomajorUSinstitutionalinvestorsasdefinedinRule15a-6undertheUSSecuritiesExchangeActof1934asamendedandmaynotbefurnishedtoanyotherpersonintheUnitedStatesEachmajorUSinstitutionalinvestorthatreceivesacopyofthisreportbyitsacceptancehereofrepresentsandagreesthatitshallnotdistributeorprovidethisreporttoanyotherpersonAnyUSrecipientofthisreportwishingtoeffectanytransactiontobuyorsellsecuritiesbasedontheinformationprovidedinthisreportshoulddosoonlythroughaUS-registeredbroker-dealerForrecipientsofthisdocumentinSingaporeThisreportisdistributedinSingaporebyCMBISingaporePteLimitedCMBISGCompanyRegnNo201731928DanExemptFinancialAdviserasdefinedintheFinancialAdvisersActCap110ofSingaporeandregulatedbytheMonetaryAuthorityofSingaporeCMBISGmaydistributereportsproducedbyitsrespectiveforeignentitiesaffiliatesorotherforeignresearchhousespursuanttoanarrangementunderRegulation32CoftheFinancialAdvisersRegulationsWherethereportisdistributedinSingaporetoapersonwhoisnotanAccreditedInvestorExpertInvestororanInstitutionalInvestorasdefinedintheSecuritiesandFuturesActCap289ofSingaporeCMBISGacceptslegalresponsibilityforthecontentsofthereporttosuchpersonsonlytotheextentrequiredbylawSingaporerecipientsshouldcontactCMBISGat6563504400formattersarisingfromorinconnectionwiththereportPLEASEREADTHEANALYSTCERTIFICATIONANDIMPORTANTDISCLOSURESONLASTPAGE12