New opportunities emerge in the fields of payment, gaming and advertising

Goldman Sachs today released its research report, keeping Tencent's (0700.HK) stock rating at "buy" unchanged at a target price of HK $700.

The following is a summary of the contents of the report:

New opportunities emerge in the fields of payment, gaming and advertising; "Buy ratings

Changes：

Social networking services such as micro-credit have unique competitive advantages, especially the stickiness of the user base and the high proportion of mobile service usage, coupled with the depth of user understanding of these services, which means that there will be a variety of commercial opportunities in the future. We keep the stock rating of Tencent unchanged at "buy".

Analysis：

-paying: The Financial Times reported April 13 that Facebook "will be in a few weeks" with the approval of Irish regulators to launch an electronic money service in the country that can provide transfer services between users and allow users to save on the Facerbook platform. If the report is true, then Facebook's move means that Tencent's payment and wealth management services are reasonable, and we anticipate that these services will be included in future development of credit assessment services.

In a situation where banks are already preparing for a new world, we believe that the debate over payment technology will focus primarily on secure national (mobile) barcode standards. The implementation of the new standards is unlikely to be a major disruptive factor in the industry because the new standards are likely to be introduced in stages.

-Game: "Candy smash legend" developers King Digital Entertainment and Tencent announced on April 16 that Tencent has won the "Candy Smash Legend" (the number of active users on the Facebook platform has reached 57 million people, In the fourth quarter of 2013, global revenue of 470 million U.S. dollars in China's exclusive agent, will bring the Chinese market the game's localized version. Chinese iOS and Android device users who want to play this game, they must log on to the mobile phone QQ and micro-credit Game center.

-Social Advertising:

Tencent announced on April 12 that it plans to launch a self-service advertising system for public numbers on the micro-credit platform to sell ads on a wide range of platforms. Based on the commercial strength of Facebook and Twitter, we expect the long-term advertising opportunities for micro-letters to be up to $1 per user per quarter, or $1.4 billion a year.

Valuation：

Based on the peg value of 1.2 times times (the market profit growth ratio), we maintain Tencent's 18-month target price unchanged at 700 Hong Kong dollar.

Main risk: Legacy desktop gaming;