DouYu International Holdings Limited
DouYu International Holdings Limited (NASDAQ: DOYU) is a Chinese live-streaming platform focused on games. Users can enjoy immersive and interactive games and live entertainment streaming via the company's platform, available on PC and mobile apps. It makes money through live broadcasting and advertising. As of January 27, 2022, DOYU has 324.41 million American Depository Shares (ADS) listed and outstanding, with every ten ADS representing one ordinary share.
Why Should Investors Exit?
Valuation Methodology: EV/Sales Multiple Based Relative Valuation
(Analysis by Kalkine Group)
* % Premium/(Discount) is based on our assessment of the company's NTM trading multiple after considering its key growth drivers, economic moat, stock's historical trading multiples versus peer average/median, and investment risks.
DOYU's share price has declined 80.94% in the past twelve months and is leaning towards the lower-band of its 52-week range of USD 1.98 to USD 20.54. Also, its shares are hovering in a steep bearish zone with price traded well below its crucial long-term as well as short-term support levels of 50-day and 200-day SMA. We have valued the stock using the EV/Sales-based relative valuation methodology and arrived at a target price of USD 2.40.
Given the harsh regulatory environment between the US and China, the continued reduction in stock price, deterioration in fundamentals, and other technical indicators, we recommend a "Sell" rating on the stock, which closed at USD 2.52, up 14.03% as of January 27, 2022.
DOYU Daily Technical Chart (Source: REFINITIV)
* The reference data in this report has been partly sourced from REFINITIV.
* All forecasted figures and industry information have been taken from REFINITIV.