Huya Earnings: Decline in Sales Offset by Improvement in Profitability

Although no-moat Huya’s first-quarter earnings were ahead of our and Refinitiv consensus expectations, management sounded cautious about the rest of this year. We have fine-tuned our near-term forecasts but maintain our fair value estimate of $7.70 per share. The bulk of our valuation stems from Huya's net cash position of $6.20 per share as of the end of the first quarter of 2023. The stock's closing price of $3.21 on May 16 represents nearly a 50% discount to the company's net cash position.