The beauty of the stock market is you can purchase a stock for the same price as it was 3 years ago despite the stock had grown a lot. Sharing my study on Huya, which is selling at the same price as 3 years ago but:
1) Revenue is up 209%
2) Net profit is up 491%
3) Mobile MAU is up 82%
4) MAU is up 92%
5) Paying user is up 74%
A brief introduction, Huya is the largest game streaming platfom in China which is the Chinese version of Twitch. In 2014, Amazon actually acquire Twitch for 70x its price to sales while Huya current PS is only 3.
Esport is expected to grow at a 17% CAGR till 2025 and there is a huge market to be captured. Huya biggest shareholder is Tencent which is a dominating game developer in China. There is an ongoing merger acquisition between Huya and Douyu which will allow them to control 80% of the game streaming market in China if it goes through. This is subject to approval by the State Administration for Market Regulation, a Chinese antitrust agency.
Besides China, Huya have present outside of China with its Nimo TV. According to latest earnings call, overseas revenue is doubled yoy and the oversea loss is narrowed.
With this strong growth in the past, Huya also have a very healthy balance sheet with a current ratio of 5. This make it even more undervalued since it is selling for the same price as it was 3 years ago while increasing its cash pile, net profit and user base.
Disclaimer: This is just for sharing purpose.
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