HUYA: Weak Core Business And No Clear Turnaround In Sight

2025-05-19 15:24:22 ET

Summary

• HUYA's fundamentals continue to deteriorate, with live streaming revenue declining and non-live segments unable to offset core weakness.
• Margins are under pressure as cost-cutting reaches its limits and streamer retention costs rise, further challenging long-term profitability.
• Valuation is justified only by HUYA's net cash position, with no visible turnaround in topline or user growth; we reiterate my SELL rating.
• Potential M&A is the only upside risk, but regulatory hurdles and weak fundamentals make the stock unattractive compared to quality growth names.

Huya’s (HUYA) 1Q25 can be characterized by weakness across its key business segments and further deterioration of its fundamentals. Notably, live streaming continues to see revenue decline due to a combination of macro and competitive challenges as viewers cut back on discretionary spending and streamers migrate to alternative platforms....

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