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Why HUYA Stock Is Soaring


Jan. 25 2019, Published 2:27 p.m. ET


Over the last couple of months, reports about a slowdown in the Chinese economy have made investors nervous. Trade tensions between the United States and China have taken a toll on investor sentiments, too. But not all Chinese companies’ investors seem to be worried about ongoing trade disputes between the world’s two largest economies. One of these companies is gaming live-stream platform operator HUYA. Let’s take a look.

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Weakness in Q4 2018

After getting listed on NYSE as an American depositary receipt in May, HUYA initially didn’t get much investor attention. In the third and fourth quarters of 2018, the stock fell 28.3% and 34.4%, respectively.

In the fourth quarter of 2018, many other Chinese companies—including Weibo (WB), Momo (MOMO), Baidu (BIDU), Alibaba Group (BABA), 58.com (WUBA), New Oriental Education & Technology Group (EDU), Vipshop Holdings (VIPS), Uxin (UXIN), and Tencent Holdings (TCEHY)—also traded on a negative note. WB, MOMO, BIDU, BABA, WUBA, EDU, VIPS, UXIN, and TCEHY lost 20.3%, 45.9%, 30.6%, 16.8%, 26.3%, 25.9%, 12.5%, 28.4%, and 3.4%, respectively, in the last quarter.

HUYA’s solid gains in 2019

After massive declines in the previous two quarters, HUYA stock has started 2019 on a strong note. As of January 24, HUYA had already risen 29.7%. Also, on Friday, January 25, it posted a high for the day of $22.45, reflecting 11.8% gains. Friday’s high was also not far from Wall Street analysts’ consensus price target of $22.98.

According to the data compiled by Thomson Reuters, ten analysts were covering HUYA stock. Five of these analysts suggest a “buy” on the company while the remaining five recommend a “hold.”

HUYA is expected to release its quarterly earnings results in February. As the company’s nearing its fourth-quarter earnings event, which has yet to be officially announced, investors’ high hopes from the company’s earnings could be one of the drivers of its stock.

In January so far, Chinese firms YY (YY) and Tencent Music (TME) have risen 20.2% and 20.3%, respectively.


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