CLSA Double Downgrades HUYA Inc. (HUYA) to Underperform (4)
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CLSA analyst Sally Chan downgraded HUYA Inc. (NYSE: HUYA) from Buy (1) to Underperform (4) with a price target of $27.00 (from $25.00).
The analyst comments "Though Huya 4Q20 results will likely be fine, what keeps investors up at night are livestreaming regulation and anti-trust approval overhangs. The stock has appreciated over the past 2-3 months to reach our previous target price, yet fundamentally not that much has changed. We believe a merger will eventually go through but suspect that some investors would rather wait for a definitive outcome. Final details of livestreaming regulation have yet to be released, where the cap on max tipping amount could dent short-term revenue growth. While unable to model it in, we expect potential negative pressure on share price. We raise our target price from US$25.00 to US$27.00 on a slightly better profit outlook and remain optimistic on Huya’s potential post-merger, but we downgrade from BUY to Underperform in light of the above."
Shares of HUYA Inc. closed at $26.40 yesterday.
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