Goldman Sachs: China's Huya Well-Positioned In E-Sports, But Fully Valued

By 2019, 427 million people will be watching e-sports, according to Newzoo. In China, Huya Inc. HUYA is the market-leading streaming platform, according to Goldman Sachs. 

The Analysts

Goldman Sachs analyst Piyush Mubayi initiated coverage of Huya with a Neutral rating and $34 price target. 

The Thesis

Huya is well-positioned to benefit from the growing online game community and live streaming updraft based on the company’s No. 1 spot in monthly active users and user time spent, Mubayi said in the initiation note. (See the analyst's track record here.) 

“Game livestreaming is an attractive segment as the streaming content taps into the gamer cohort, one of the fastest-growing user bases in China,” the analyst said. 

Huya's overall growth will be driven by an expanding user base and improved monetization, Mubayi said. E-sports are strongly gaining more viewership than traditional sports in some cases, placing Huya in a favorable position, the analyst said. 

Strategic relationships with companies such as Tencent will likely help Huya in the marketing of new and existing games while developing more exposure to other entertainment spaces, according to Goldman Sachs. 

Mubayi's Neutral stance is due to the stock being fully priced, the analyst said. 

Price Action

Huya shares were trading down 3.35 percent to $32.32 at the time of publication Friday. 

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