2023-04-14 09:27:58 ET
With China continuing to reopen its economy and general society following some of the most-stringent COVID-19 restriction in the world, Wall Street analysts have begun assessing the outlook for some of the country's larger tech industries.
On Friday, it was the turn of J.P. Morgan's Daniel Chen who said he sees "a better outlook for the live streaming industry" this year, and raised his ratings on Internet content and service companies Huya ( NYSE: HUYA ), Hello Group ( NASDAQ: MOMO ) and DoYu International Holdings ( NASDAQ: DOYU ).
Chen lifted his rating on Hello Group ( MOMO ) to overweight from neutral, and raised his view on both Huya ( HUYA ) and DoYu ( DOYU ) to neutral from underweight. Chen said China's continued reopening "should drive better virtual consumption demand" this year over 2022, and increased supply of games and a "more benign regulatory environment" should help drive game streaming traffic, in particular.
Chen called Hello Group ( MOMO ) "a leading mobile social platform operator in China" that operates numerous social media apps. Chen raised his price target on Hello Group's ( MOMO ) stock to $13 a share from $5.
For Huya ( HUYA ), Chen cited the company's new licensing agreement with Tencent ( OTCPK:TCEHY ) on the League of Legend gaming tournament as a source that should drive business improvement, and narrow its losses this year. Chen gave a slight lift to Huya's ( HUYA ) price target, lifting it to $3 a share from $2.30.
Chen was little more cautious about DoYu ( DOYU ), as in addition to setting a neutral rating on the stock, he barely raised his price target to $1.20 a share from $1.10. Chen said investors remain concerned about DoYu ( DOYU ) due to "competition from short form video peers" and uncertainty about its live streaming revenue outlook.
In early trading, Hello Group ( MOMO ) shares rose almost 4%, while HuYa ( HUYA ) was up by 3% and DoYu ( DOYU ) rose nearly 2%.
Earlier this week, Chinese Internet kingpin Alibaba ( BABA ) was dinged following reports that Beijing will propose new controls over China's AI industry.
For further details see:
Chinese Internet stocks rise on slate of J.P. Morgan upgrades