...November 14, 2024 HONG KONG (S&P Global Ratings) Nov. 15, 2024--Tencent Holdings Ltd.'s credit profile should further strengthen next year. New initiatives, such as Mini Shops, AI-powered advertisement targeting, and Video Accounts, will drive up profits and lead to modest diversification away from the company's online game business. Tencent (A+/Stable/--) has reported strong profit growth over the past several quarters. Tencent's estimated third-quarter EBITDA growth of close to 20% year on year was slightly ahead of our forecast and well above the 8% year-on-year revenue growth. Improving profitability in some business segments, such as Tencent Music, re-accelerating online game revenue growth, and a shift toward more profitable businesses such as Video Accounts advertising and e-commerce benefited overall margins. Low advertising load for Video Accounts, new e-commerce opportunities such as the launch of Mini Shops, and AI-powered ad targeting will boost Tencent's profit and cash flows,...
