腾讯控股(00700) 　　Event 　　We estimate 3Q16 revenue growth at 45% YoY, in line with consensus, andearnings growth at 37% YoY, 3% below consensus. By segment, we project96% YoY and 59% YoY revenue growth from mobile games and advertising.We believe the concern on Tencent's 3Q game revenue is overdone and weremain confident on its game growth and pipeline. We expect payment andcloud revenue to continue strong triple-digit% YoY growth (284% YoY in3Q16E). We maintain earnings and keep SOTP-based TP at HK$241. 　　Impact 　　3Q16 results reporting on Nov 16. We expect 3Q16 revenue to grow 8%QoQ and 45% YoY to RMB38.6bn on 24% YoY online game revenue growthand 59% YoY online ads revenue growth, in line with consensus. We estimateadjusted net income to grow 1% QoQ and 37% YoY to RMb11.4bn, 3% belowconsensus. Adjusted OPM should narrow from 41.8% in 2Q16 to 39.8% in3Q16 due to more SG&A expense on payment and online media. 　　Mobile games: top titles held up with solid pipeline. In 3Q16, the flagshipmobile game Honor of Kings stayed robust at top 5 grossing most of the time,and other long-lived titles including Naruto and Timi Run Every Day held upwell in the top 10-20 grossing. Mobile JX with Kingsoft continued momentumand maintained top 10 during the quarter. It has a solid mobile game pipelineincluding Legacy TLBB, Pocket JX, Mobile DnF, Contra Mobile. We model3Q16 mobile game revenue to grow 8% QoQ and 96% YoY to RMB10bn. 　　PC games: LoL staying stable. In Sep, LoL conducted a large-scalecampaign (战斗之夜) that awarded character skins, coins and experience.Also, the 2016 World Championship of LoL took place from Sep 29 to Oct 29.Besides, the player demographics between LoL and Overwatch do notoverlap much, according to the company. The impact from Overwatch on LoLshould remain limited, in our view. We currently project PC game revenue togrow 2% QoQ and 4% YoY to RMB11.5bn in 3Q16. 　　Cloud and payment continued strong growth. At the recent TencentGlobal Partner Conference, Tencent announced overseas initiatives to aidgame developers pursue overseas expansion and also released a new IoTcloud in addition to cloud solutions dedicated to each vertical e.g. finance,gaming, video, and big data. We expect Tencent Cloud and paymentcontribute to 284% YoY revenue growth of the Others segment in 3Q16 andlift revenue of this segment from 4% in 3Q15 to 10% in 3Q16. 　　Earnings and target price revision 　　No change. 　　Price catalyst 　　12-month price target: HK$241.00 based on a Sum of Parts methodology. 　　Catalyst: Game launches, WeChat Moment ads, margin recovery. 　　Action and recommendation 　　Reiterate OP and HK$241 TP.