...May 17, 2024 HONG KONG (S&P Global Ratings) May 17, 2024--Tencent Holdings Ltd. has laid a strong foundation for earnings growth. The China-based company's development of Video Accounts, Mini Programs and Mini Games, its AI-driven ad platform, and other major initiatives will power profit growth over the next few quarters. Tencent (A+/Stable/--) will continue to strengthen its credit profile, in our view, after turning net cash on S&P Global Ratings' adjusted basis in the first quarter of 2024. Our free operating cash flow forecast of more than Chinese renminbi (RMB) 200 billion will adequately cover higher annual dividends, share buybacks, and acquisitions and other investment spending that we estimate at over RMB150 billion. We estimate Tencent's online advertising revenue will increase more than 20% in 2024. Robust revenue growth from Video Accounts and higher ad spending are key drivers. Ad placements rose on the back of improving metrics such as clickthrough rates, attributed to better...
