Earning Alert: Core net profit declined by 23% in 1Q22, below market expectations; Expect game growth to resume in 2H22
- Non-IFRS net profit declined by 23% y-o-y to Rmb25bn in 1Q22, below market expectations of c.18% decline
- Sluggish performance was due to slower revenue growth, margin contraction and higher operating expenses
- Revised down non-IFRS net profit by 15% and 12% for FY22F and FY23F, accordingly
- Maintain BUY on long term potential of the WeChat ecosystem, TP lowered to HK$447
1Q22 results highlights
– Revenue was flat at Rmb135bn, below market expectations of 4% growth.