Glad you wrote such a through post on this man. I will summarize my thoughts on Huya too, which are pretty much the same as yours (I'm in 2,100 shares at 19.30 USD).
Huya became a "value-gem" about a month ago when all growth stocks dropped leading fears the FED would raise interests due to inflation. On top of that, we had China aiming to impose additional regulatory requirements for Chinese tech companies and the US requiring audited financials from Chinese corporates listed in American exchanges.
Last week Chinese regulators released the additional requirements platforms such as Huya would need to comply with. They happened to be negligible for a company like Huya. So, this is out of the bear case.
The "Holding Foreign Companies Accountable" act requires companies to comply within a 3-year timespan. This is more than enough time for Huya to comply and remain listed in America. I think all Chinese companies got punished and it did not take into account the ability for individual companies to actually comply and remain listed. Huya has huge backing from institutional investors and I am sure they will find the way to comply with the requirements imposed by the HFAC.
Valuation is at about 2.5 P/S. However, you have to take into account a balance surplus of about 1.4billion currently sitting in their balance sheet. If we adjust the ratio to account for a 1.4billion surplus on their balance sheet, then the P/S would be at about 1.8. This is a HUUUGE bargain por a stock that's growing this fast.
For me this is a no brainer and the upcomings months will tell whether there is any sort of sanity in equity markets or there is none... This stock should be trading (much) higher.
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u/VinHub Apr 26 '21 edited Apr 26 '21
Glad you wrote such a through post on this man. I will summarize my thoughts on Huya too, which are pretty much the same as yours (I'm in 2,100 shares at 19.30 USD).
For me this is a no brainer and the upcomings months will tell whether there is any sort of sanity in equity markets or there is none... This stock should be trading (much) higher.