HUYA(US:HUYA)2024-07-16 08:31Investment Rating - The report maintains a "Buy" rating for the company with a target price adjusted to $6.00, indicating a potential upside of 36% from the current price of $4.40 [3][5]. Core Insights - The company's revenue is expected to grow by 2% quarter-on-quarter to RMB 1.53 billion in Q2, driven by new business initiatives that may lead to positive revenue growth [3]. - The live streaming business is stabilizing, while game-related services are anticipated to be a new growth driver, potentially marking a turning point in the company's performance [3]. - The report highlights an increase in self-produced content, which may raise content costs but is expected to enhance user engagement and platform activity [3]. Financial Projections - Revenue projections for Q2 show a slight decline in live streaming revenue by 2% to RMB 1.23 billion, while game-related services are expected to maintain high growth [3][4]. - The gross margin is projected to decrease by 1.1 percentage points year-on-year to 13.9%, with an adjusted net profit forecast of RMB 67 million, translating to a net profit margin of 4.4% [3][4]. - The company is expected to maintain operating profit close to breakeven, with cash reserves exceeding $1.1 billion, which is higher than the current market capitalization of $1 billion [3].