BOCOM INTL released a research report stating that Tencent Holdings (00700/Buy, current price corresponding to 21.0x 2025 P/E ratio) saw September mobile game revenue stabilize year-over-year, with strong performance from "Delta Force" domestic version and "Clash Royale" international version offsetting high base effects. Other evergreen games remained stable, with a rich pipeline of upcoming new games expected to contribute revenue growth and support steady earnings growth. The firm expects AI applications to continue driving efficiency optimization and profit release, and is optimistic about long-term valuation enhancement potential. NetEase (NTES.US/09999/Buy, current price corresponding to 17.5x 2025 P/E ratio) mobile game revenue maintained positive year-over-year growth, with optimism for PC games to continue strong momentum and limited downside risk for valuation.
BOCOM INTL's main viewpoints are as follows:
Tencent's new games mitigated high base effects in domestic mobile game revenue, with "Delta Force" domestic version and "Clash Royale" international version maintaining strong performance. Domestic revenue declined by RMB 2.7 billion year-over-year (8%), mainly due to high base from "Dungeon & Fighter Mobile", partially offset by incremental revenue from new games "Valorant: Operation Source" and "Delta Force". "Delta Force" achieved record-high September revenue of RMB 1.5 billion, driven by continued user growth (domestic daily active users exceeding 30 million). "Valorant: Operation Source" generated RMB 400 million in September revenue, maintaining stable rankings of 8-12 on iOS game revenue charts in early October.
Overseas revenue increased by RMB 670 million year-over-year (9%), mainly due to incremental revenue from "Clash Royale" offsetting high base effects from "Brawl Stars". "Clash Royale" continued its revenue growth trend, with September revenue exceeding RMB 750 million, up 360% year-over-year and 7% month-over-month.
NetEase's overseas new games released incremental revenue. Domestic revenue increased slightly by RMB 70 million year-over-year (1%), with incremental contributions from new games including "Where Winds Meet" and "Eggy Party" offsetting high base effects from games like "Justice Mobile". Overseas revenue increased by RMB 160 million year-over-year (18%), benefiting from incremental revenue contributions from new games such as "Destiny: Rising" (September revenue exceeding RMB 100 million) and "Marvel Ultimate Alliance".
Key highlights: 1) Tencent explores interactive film-game integration, releasing "Prosperous Dynasty: Queen's Game" on September 9, with cumulative sales exceeding 1 million units. 2) 145 domestic game licenses and 11 imported game licenses were issued in September 2025. Attention should be paid to the testing progress and launch plans of Tencent's open-world RPG cross-platform game "Return" and miHoYo's new Honkai series game "Honkai: Karmic Elf".